24 January 2014 09:54 [Source: ICB]
US January epoxy resin contracts have settled mostly at rollovers, sources said on 14 January.
The rollover puts January epoxy resin prices at $1.32-1.38/lb ($2,910-3,042/tonne) on a DEL bulk (delivered in bulk) basis.
Most sources attributed the rollover to a long market, which stems from high producer inventories and aggressive selling by overseas producers.
“Sellers realise that buyers will walk away in large swathes if they don’t stay competitive,” an epoxy buyer said. “Everything started with the Asians coming in with low prices.”
Sources said most Asian material in January is being offered around the $1.27-1.32/lb level on a DEL bulk basis, and that some US spot material is being offered here as well.
The high producer inventories are a result of weaker-than-expected demand and sales for much of 2013.
Buyers were unable to get contracts down, except in a few cases, largely because feedstock costs have been rising.
“We are in big trouble with the feedstock costs,” a US epoxy producer said. “We are going to need help on that in the coming months.”
Producers were also not helped by the demand situation, which has been described as steady to slightly softer.
Several buyers said they were not making January orders because they did not need to restock, as they bought ahead in late December despite year-end inventory taxes.
Other buyers said they have been restocking, leading sellers to say that December/January demand has been mostly flat year over year.
Major US epoxy resin producers include Dow Chemical, Huntsman and Momentive.
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