22 October 2013 21:36 [Source: ICIS news]
HOUSTON (ICIS)--US October epoxy resin contract prices fell by 2.1% on Tuesday, tracking long supply from domestic and import sellers.
Prices declined by 3 cents/lb ($66/tonne, €48/tonne) in October, moving contract assessments to $1.35-1.41/lb on a DEL bulk (delivered in bulk) basis.
September contracts were assessed at $1.38-1.44/lb DEL bulk.
The decline came largely on the back of long supply domestically and continued aggressive selling by overseas producers.
“There is all this pressure from Asian imports,” a buyer said. “There was a pretty straight-forward price decrease in October.”
The aggressive selling from the Asian market has largely stemmed from cheaper feedstocks in that region, as well as weak domestic demand there.
That has allowed Asian sellers to price their material at a discount to US contract material, and US buyers have been eager to grab the business.
“This will remain a buyer’s market until a producer leaves or we have a force majeure,” another US buyer said. “We see things remaining long into 2014.”
A US producer agreed with the sentiment, adding that current epoxy resin prices have eroded margins for US sellers.
“Everyone is bottom feeding right now,” the producer said. “We might see a slight change at the end of the year, but that’s unlikely.”
Domestic epoxy resin producers are also feeling the effects of weaker-than-expected demand for most of the year, which has led to higher inventories than desired.
Demand remained steady to soft in October, sources said, mostly on seasonal factors and preparations to run down inventories ahead of year-end taxes.
Some market players said US October contracts rolled over, although some of these rollovers were coupled with rebates or additional material.
“The market is bad enough as it is,” a source said. “We don’t need bad practices like those making it worse.”
Most buyers agreed, adding that some sellers have offered prices in the low- to mid-$1.30s/lb if the buyer is willing to commit to that price for the rest of the year.
However, most buyers said they declined the offer, as prices could move lower in November and December.
Major US epoxy resin producers include Dow Chemical, Huntsman and Momentive.
($1 = €0.73)
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