Europe BPA spot prices increasingly pressured by S Korea material

08 November 2013 12:13  [Source: ICIS news]

LONDON (ICIS)--Bisphenol A (BPA) spot prices in Europe are increasingly under pressure from competitive offers for South Korean material, sources confirmed on Friday.

“BPA prices from Korea are around $1,700/tonne [€1,285/tonne] CIF [cost insurance freight] Italian port. The Asian’s are still being very aggressive,” said a buyer.

The buyer quoted €1,300-1,400/tonne FD (free delivered) for both spot and contract volumes.

Another buyer said it would not disclose the offers it has received for Asian and Russian material because they were so low.

“We’re getting material from the Far East and Russia - prices are so low, I can't disclose the number. Demand is the same; it’s not improving, but not deteriorating,” the buyer said.

“It's a quiet period - everybody trying to get rid of volume,” it added.

Despite such pressure in the spot market, European producers say they cannot and will not offer at such levels.

“I have zero spot market sales of BPA. It’s not worth my time. I don't see the spot market being very much fun for anyone - there is length in all regions,” said one producer.

Another said by dropping its prices to compete with the offers currently being reported in Europe would be dropping below cash costs.

A trader said it had heard even lower prices than $1,700/tonne.

“At the moment from Asia there is material coming in at low numbers. Asia is also very low and the exchange rate has helped. $1,700/tonne is not the lowest price - you can get even low than this.”

Meanwhile, BPA contract prices from October to November have moved down, according to the majority of market participants.

Sources said the lower contract prices reflected falls in the value of feedstock phenol and acetone.

Further upstream, the November benzene contract price moved down by €78/tonne, while the November propylene price moved down by €30/tonne.

In relation to a recent spot offer, a European BPA buyer said: “Korean material is crazy low. There lots of people offering the same product and I don't know who is really buying. “This is too low to be sustainable.”

The BPA market is been heavily impacted by new capacities coming on in Asia, as well as a drop in demand for BPA derivatives polycarbonate (PC) and epoxy resins.

Both materials are used heavily in the construction and automotive industries, which in turn are determined by GDP.

($1 = €0.74)

By: Julia Meehan
+44 20 8652 3214

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