13 August 2013 22:49 [Source: ICIS news]
HOUSTON (ICIS)--US epoxy resin contracts for August fell by 4.1% on long supply, sources confirmed on Tuesday.
Sources said that prices settled 4-6 cents/lb ($88-132/tonne, €66-99/tonne) lower for most contracts, which a producer agreed with.
ICIS prices were assessed the full 6 cents/lb lower based on discussions that contract prices had moved into the low-$1.30s to mid-$1.40s/lb, putting the assessment at $1.38-1.44/lb on a DEL bulk (delivered in bulk) basis.
The producer said that several contracts fell by 1-2 cents/lb but that the majority of the market fell by the larger amount.
Market players agreed that the biggest reason for the fall is the continued long supply of material, with soft demand another key factor.
“There has to be a significant amount of oversupply,” a buyer said. “I am getting more offers for spot material than I have all year.”
Buyers said that overseas sellers are remaining aggressive in offering material as their domestic markets are soft.
US producers also have more material than desired, owing to softer-than-expected demand building up inventories.
The long supply on both sides has allowed buyers to pit overseas and domestic sellers against each other.
“The overseas guys are offering about a 5 cent/lb discount, which is still attractive,” the buyer said. “The question is how reliable will that supply be long-term?”
Market players added that other than automotive coatings, most epoxy resin downstream markets are struggling for sales.
Major US epoxy resin producers include Dow Chemical, Huntsman and Momentive.
($1 = €0.75)
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