02 July 2013 20:04 [Source: ICIS news]
HOUSTON (ICIS)--US July epoxy resin contracts are expected to settle at a decline or rollover, sources said on Tuesday.
Buyers said they are starting to settle contracts at a decline of 3-4 cents/lb ($66-88/tonne, €51-68/tonne), owing mostly to long supply.
This would put July contracts in a $1.45-1.52/lb range on a DEL bulk (delivered in bulk) basis, the buyers said.
“The market is long so we can get whatever we want,” a buyer said. “Demand is kind of mushy. It’s only enough to keep the business going.”
Some producers said they are holding out for a decline of 1-2 cents/lb, while others are holding out for a rollover.
“We’re suffering enough on the profitability without going lower,” a producer said. “We haven’t seen any break in raw materials. They’re still high.”
Market players said the long supply is being created by softer-than-expected domestic demand and a glut of less expensive imports.
Buyers in the architectural coatings market said that the typical late-spring and summer boost to demand has not materialised and appears unlikely to do so.
Producers were expecting the increase in demand and built up inventories, sources said, which has made domestic supply slightly long.
Coupled with a soft Asian market that has pushed sellers there to move material into the US, the US market is described as long by most buyers.
“We’re not sure how the Asians are doing it,” the producer said. “But demand would still be soft without the extra material.”
Currently, US spot prices are assessed by ICIS at a 12-16 cent/lb discount to domestic product.
“The domestic producers have been concerned about the imports for a while now,” another buyer said. “Now they might be ready to compete.”
Major US epoxy resins producers include Dow Chemical, Huntsman and Momentive.
($1 = €0.77)
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