February contracts gain 2.3% on rising feedstock costs as well as higher import prices
US February epoxy resin contracts gained 2.3% on Tuesday, tracking surging feedstock costs and slightly higher import prices.
US domestic epoxy resin contracts for February were assessed up by 3 cents/lb ($66/tonne) at $1.35-1.41/lb on a DEL bulk (delivered in bulk) basis.
Sources were mixed regarding settlements, with some buyers reporting a rollover and others saying that they went up 2-4 cents/lb.
Some buyers said that although they rolled over in February, they had agreed to take increases of 2-3 cents/lb in March.
“This was more than just a feedstock issue,” a US producer said. “This was a long-standing situation that needed to change if they want domestic suppliers.”
The producer added that it will be seeking a 5 cent/lb combined increase for February and March with most of its buyers.
US February epoxy resin contracts were initially nominated up 5 cents/lb by one producer and by 8 cents/lb separately by two producers.
This was based on the increase in feedstock costs, as well as expectations that overseas producers would push for higher prices on imported material.
However, buyers said that imported epoxy resin prices have only gained 1-2 cents/lb as some sellers remain aggressive.
Overall, the US epoxy market is described as very long because of lower-than-expected demand in the second half of 2013 and aggressive selling by overseas producers.
Buyers said that until demand levels improve globally, the US market will remain long, even if demand domestically surges in 2014 compared to 2013.
Most market players expect a stronger 2014, but not by a significant amount.