Europe epoxy resins prices pressured by cheaper imports

03 September 2013 11:43 Source:ICIS News

LONDON (ICIS)--European epoxy resins prices are expected to decline this month because of cheap imports from Asia and the Middle East, sources said on Tuesday.

Buyers expect a €30-50/tonne ($39-66/tonne) decrease in September, while producers are aiming to limit this to rollovers or reductions of no more than €20/tonne.

"Feedstock propylene and benzene costs have increased in September, so sooner or later we will have to pass that on," an epoxy resins producer said.

"This cannot go on forever, we cannot afford a huge drop," the producer added.

As the table shows below, imports pro-rata have increased compared with previous years and this trend is unlikely to stop because the Asian market is oversupplied and demand overseas is weak.

"They [European sellers] tried to keep prices up at the beginning of this year, but now they need to shift extra volumes so they have lowered prices [in response to cheap imports]," a buyer said.

The same is happening in the US, where prices have dropped about $100/tonne since imports from Asia increased, the buyer added.

Imports now take up a significant part of the European market and this means that this is eating into the market share of domestic sellers.

"Imports have gained share and they are now a big chunk of the market and since the market has not grown this means EU-sourced material is losing share," a second producer said.

According to buyers, Asian liquid epoxy resins are offered at €2,100-2,150/tonne DDP (delivered, duty paid) Europe, for September delivery, depending on origin.

The EU and South Korea signed a free trade agreement in 2011 and since then South Korea has become the largest exporter of epoxy resins to Europe.

The European August epoxy resins contract price is at €2,525-2,575/tonne FD (free delivered) NWE (northwest Europe).


The EU's main epoxy resins importing partners (Eurostat, tonnes)

PERIOD

SOUTH

KOREA

TAIWAN

US

SWITZERLAND

SAUDI

ARABIA

THAILAND

TOTAL

Jan.-Dec. 2011

9,434

14,126

9,274

44,662

13,933

11,067

115,074

Jan.-Dec. 2012

12,645

10,044

8,981

49,023

15,667

10,196

113,495

Jan.-May. 2013

9,151

6,090

2,865

18,096

8,356

5,831

54,173


Eurostat data is subject to revisions when more up-to-date data becomes available.

($1 = €0.76) 

Follow Janos Gal on Twitter @janosgalICIS

By Janos Gal