LONDON (ICIS)--European epoxy resins sellers appear to have failed to push through significant price hikes in August, due to soft summer holiday season demand levels and good availability, despite ongoing margin pressure, according to market sources on Tuesday.
Epoxy sellers noted that higher global bisphenol A (BPA) prices and reduced imports into Europe are putting pressure on margins.
Several European epoxy resins producers said they were targeting increases of €70-100/tonne in August. Another seller noted that it was targeting a similarly-sized increase, but spread over several months, each at about €30/tonne.
Nevertheless, sell-side sources noted limited success with the August price hike. One seller said it was only able to raise prices for a small number of customers, those generally with lower prices.
The seller said that due to its lack of success in implementing higher prices in August, it will target a greater increase in September of around €60-100/tonne.
“We really planned to increase prices by €90-100/tonne during 3 months, so we are pushing for let’s say €30/tonne [increase] every month. I can say at some accounts there is success, but only where price was lower, so not across the board. We will go into Sep with target of €60-90/tonne increase,” it said.
Nevertheless, it added: “I think €100/tonne increase [for September] is a must now, what is needed for the BPA increase. I do not expect any further increases to year end due to slower fourth quarter.”
An overseas seller serving Europe said it mostly stuck to its target of raising price by $150/tonne, succeeding on average with a $100/tonne increase. It said it is targeting another price hike of $150/tonne for September as costs have risen by about $200/tonne.
Three buy-side sources noted that European sellers initiated August price talks with sharp increases, but said that due to seasonally weak summertime demand and a well-supplied market, they settled at a rollover.
"I confirm they [sellers] came to ask for increase in August, they ask something extra, they ask based on BPA,” a seller said, adding: “Is fair, but OK, there is still volume in the market not to be tight. For my side I was able to get rollover, they will come back in September to ask again.”
Nevertheless, two of the buyers noted that they would expect a higher price in September, when market players return from holiday and demand rebounds.
“I expect demand should increase in September, at least in the second half of September. It may contribute to upwards price pressure,” a buyer said.
“August was a rollover. I think will go up in September,” one of the buyers said.
The other buyer said that although feedstock BPA costs are indeed higher, there are many arguments to support another rollover in September, such as weak demand and good supply.
European distributors generally noted slightly higher prices for material from Asian sources, up by $10-40/tonne, on the back of higher BPA costs, though some sources expect costs to continue to rise.
BPA sources have indicated that higher global pricing and lower levels of imports are likely to increase European (BPA) pricing in September.