HOUSTON (ICIS)--US December epoxy resin contracts were assessed higher this week, primarily due to higher feedstock costs and higher import prices.
The US December liquid epoxy resin contract price was assessed on Tuesday at $1.27-1.32/lb DEL (delivered) North America, an increase of 2 cents/lb ($44/tonne) from November.
Overall, sources saw a wide range of price increases this month, with most feedback centering around a 1-2 cent/lb price increase.
There was talk of higher price increases sticking in the market, although this was not seen as market wide.
Hexion was seeking to raise off-list prices for North America epoxy resins by 5 cents/lb, effective 1 December or as contracts allow, according to a customer letter.
There was upward pressure this month from feedstocks such as benzene, propylene and phenol, due to healthy downstream demand and supply constraints.
Also, bisphenol A (BPA) and epichlorohydrin (ECH) prices continue to remain firm on a global basis, according to sources.
Meanwhile, availability of domestic epoxy resin itself is healthy, while it is more limited from Asia.
At the same time, sources have spoken of domestic consumption being good for this time of year.
Spot import prices further placed upward pressure on December contracts.
Tight supply, strong demand, high feedstock costs and environmental inspections are all working to keep spot prices in China elevated.
As a result, material from other regions such as the US, Europe and Asia (ex-China) has been flowing to China as netbacks have been attractive, a reversal of typical trade flows of sorts.
Sources have spoken of the gap between domestic and import prices narrowing, with import prices moving up faster than domestic prices, making domestic material more competitive for US buyers.
Looking ahead, sources expect upward momentum to remain, as evidenced by the double-digit price increases announced for next month.
Given the volatility and uptrend in the markets, locking in supply for January and the rest of Q1 2018 early on appears to be a high priority for buyers, according to sources.
While sources do not expect to face any major supply constraints next month, they do believe there will be limited room for push back given current trends, with expectations for January prices to move significantly higher.
Major US epoxy resin producers include Hexion, Huntsman and Olin.
Focus article by Tarun Raizada
Image: Epoxy resins are used to make wind turbines like the one shown above. Source: Design Pics Inc/REX/Shutterstock