06 October 2013 13:29 [Source: ICIS news]
BERLIN (ICIS)--A European butanediol (BDO) buyer on Sunday said Asian BDO will remain long for at least the next 3-5 years, fuelling imports into Europe.
“You want to bet on will Asia stay long for 3-5 years… I think that it will,” the buyer said on the sidelines of the 47th annual European Petrochemical Association (EPCA) meeting.
Imports from Asia to Europe increased significantly in the first half of 2013 compared with the same period in 2012.
Imports from several key Asian markets - China, South Korea, Taiwan and Japan - rose from a combined 175 tonnes in the first half of 2012 to 5,093 tonnes in the first half of this year.
Some sources previously said that the rise in imports came as European buyers took advantage of low prices of BDO in Asia in the early part of 2013.
The buyer attributed this to low prices in Asia compared with Europe because of high Asian availability, echoing similar sentiments from other sources in the past few weeks.
“If you talk to the [European] producers… they’re comfortable. There’s no need for them to sell BDO lower. That’s where we suffer. How can we relieve the pain? It’s by importing from Asia… they’re desperate to sell,” the buyer said.
The buyer went on to say that it would like to see a storage tank built in Europe to hold Asian product, but there has been no investment so far because of the relatively short time that arbitrage from Asia has existed.
“The situation [price gap] between Europe and Asia has only been 12 months. I think Asian producers will consider [building tank storage in Europe]. We’ve asked for that.”
A producer last week said the rise in imports into Europe was primarily because of material arriving from the US, not from Asia.
Statistics show that BDO imports from the US rose from 1,565 tonnes in the first half of 2012 to 11,960 tonnes in the first half of this year. The producer said the increase came as US material was needed to cover domestic shortfalls in Europe.
In the first half of 2013, average monthly contract prices of BDO in Taiwan ranged from $1,999-2,156/tonne ($2,701-2,914/tonne). In Europe, the average contract price of BDO was higher, at $2,752/tonne in the first quarter and $2,738/tonne in the second quarter.
The EPCA meeting runs from 5-9 October.
($1 = €0.74)
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