Europe epoxy resins market reevaluates Asia import competitiveness

LONDON (ICIS)–The European epoxy resins market is reassessing the competitiveness of imports from Asia, as buyers look for affordable supplies of epoxy resins, according to market sources on Tuesday.

In recent months, low prices seen on the European market and the strength of the US dollar against the euro made Asian imports less attractive to European buyers, which then turned towards European suppliers.

The increased dependency on European suppliers has led to a reduction in Asian imports, which in turn has tightened the European epoxy resins market during May and into June.

One European distributor said: “Because of the price differential I think that there is a relative shortage of Asian material coming into the European market.”

However, the European epoxy resins market has seen prices increasing in April and May, with further price hikes widely expected to be seen in June.

Meanwhile in Asia, epoxy resins prices have been softening, as one European buyer said: “What we saw [is] stability in Asia, even some little decreases.”

This has led to a reassessment of the competitiveness of Asian epoxy resins imports in Europe. Several market sources have said that Asian prices have returned to competitive levels. Speaking of Asian epoxy resins prices, one European buyer said: “They have started to become level, in line, including transport.”

Another European buyer said: “Now Asia is back to competitive prices but it [imports] didn’t arrive in Europe yet.”

This highlights the inability of Asian imports to immediately relieve market tightness in Europe, as imports need time to reach Europe, following a period of fewer imports. As a result of this, market tightness in Europe is expected to continue in early June.

The second quarter is seen as a peak season for the European epoxy resins market.  

“The conclusion I tend to draw is that the market in Europe is tight and as a result the European customers are more or less forced to buy material from the Asians again,” said one European producer, adding: “I believe that the pressure on profitability from the Asians is still there.”

The producer also said that although imports are down and the European market has tightened, it is still looking at export opportunities and has been exporting more than in 2014.

Increased export opportunities for European producers is also the result of a weakness of the euro against the US dollar and lower epoxy resins prices seen in Europe. This is yet another factor adding to market tightness in Europe.

Focus article by Luke Milner