30 August 2013 09:41 [Source: ICB]
European epoxy resins prices are under pressure from increasing volumes of cheaper imports, sources said on 20 August.
EU epoxy resins imports from the rest of the world increased by 20% year on year in June, preceded by a small drop in May and a 30% hike in April.
"The Asians are still knocking on our doors to sell and there is a lot of volume available with very quiet demand in China," a paint producer said.
September negotiations are slowly beginning as players return from the Europe summer holidays. Sellers will target rollovers, depending on feedstock settlements later this month, while buyers are bidding for reductions of up to €50/tonne ($67/tonne).
Another contributing factor to increasing imports is a free trade agreement (FTA) between the EU and South Korea which gives the Asian market a huge competitive advantage.
Since 2010, imports from South Korea more than doubled and this trend will likely continue this year because domestic European material has been constantly about €100-150/tonne more expensive than imports.
"If I could, I would buy all I need from Asia [where it is cheaper]," one epichlorohydrin (ECH) and epoxy resins buyer said.
Another buyer said; "now they [European sellers] are trying to match Asian prices, but total demand has not grown, so the Europeans must be losing market share."
COSTS TOO HIGH
"In the EU they keep on telling us that raw material costs are too high and they need to increase prices, but they can't keep on using the same excuses when Asian imports are so much cheaper," the buyer added.
At the same time, exports from the EU in June dropped by 5% year on year, which puts further pressure on European sellers to offload stocks domestically, making the European market longer.
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