17 September 2013 16:48 [Source: ICIS news]
LONDON (ICIS)--European epoxy resins prices have bottomed out according to some sources on Tuesday, although others in the market feel there is further scope for reductions.
There is a view that unless producers can raise their prices over the next six weeks, it is unlikely they will be able to do so until the next season begins in 2014.
Demand tends to drop sharply between November and March - seen as the low-season for the epoxy resins sector in Europe - and market participants use November and December to destock ahead of the year-end.
However, producers will be keen to pass on recent hikes in feedstock propylene.
Traders on the other hand said European sellers will have to come out with aggressive low prices to regain market share and keep overseas competition at bay.
Opinions were also divided on what prices were currently being offered in Europe.
Spot offers from Asia and the Middle East are said to around the €2.08-2.15/kg ($2.77-2.86/kg) DDP (delivered, duty paid) Europe range, while European-origin spot material is around €2.20-2.30/kg FD (free delivered) NWE (northwest Europe).
In Eastern Europe, one producer described the market as bearish and was concerned about aggressive offers from western European producers. It said that higher propylene and epichlorohydrin (ECH) prices must be passed on otherwise they will be forced to sell at a loss.
In southern Europe, demand for solid epoxy resins seems to be declining largely because of a drop in orders from the can coating industry.
Operating rates in Europe are estimated to be at about 65-70% of nameplate capacity.
($1 = €0.75)
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