Europe distributors favouring speciality markets - FECC meeting

18 June 2013 17:19  [Source: ICIS news]

HAMBURG (ICIS) -- European distributors are targeting speciality markets for future business and turning away from traditional commodity grades, sources said on the sidelines of the European Association of Chemical Distributors (FECC)’s annual conference in Hamburg, Germany, on Tuesday.

One attendee of the conference said that distribution of speciality grades of petrochemicals is where distribution in Europe is heading.

“No one is interested in commodities any more,” a second participant said.

This move towards more specialised business leaves the door open for producers to supply direct to end users, which has been the case in smaller solvents markets such as MEK and MIBK for some time now.

The European MEK and MIBK markets have seen demand drop in 2013 because of the poor economic environment. Both are oversupplied, which allows buyers to shop around the distribution market for the best price available and demand "just-in-time" delivery to keep inventories to a minimum.

Subsequently, greater amounts of consumers are requesting half or partial truck loads of product from MEK and MIBK distributors, purchasing the bulk of their material direct from the producer. 

This could see these, and other smaller markets, shift from being a distributor-heavy industry to distributors being almost cut out altogether.

Alternatively, this could lead some distributors to bow out of the market, leaving the others to take on any additional available volumes not serviced directly by producers.  

By: Matt Tudball
+44 208 652 3214

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