SINGAPORE (ICIS)--Discussions for epoxy resins in Asia were mostly range-bound this week, defying for now the downtrend seen in China’s domestic market.
Any further losses in China, however, could eventually weigh on export prices of northeast Asia-origin materials.
In northeast Asia, usual suppliers outside of China stood their grounds on their prior offers, which averaged around $2,350/tonne FOB (free on board).
Some transactions did materialise at around this level for deliveries to southeast Asia, market sources said.
But the mood in China was sullen, as epoxy trades tumbled to yuan (CNY) 22,000/tonne DEL (delivered) east China, alongside parallel losses in upstream epichlorohydrin (ECH) market.
This was lower by more than 8% from the previous week, as epoxy resins transactions averaged around yuan CNY24,000/tonne DEL east China in the last two weeks, according to ICIS data.
Buying tempo for epoxy has also slowed down in China amid weakness in upstream ECH prices.
On the demand front, doubts have also lingered on whether newer requirements from China’s wind power sector may be sufficient to replace demand losses from traditional applications such as automobiles and construction.
Latest official data showing China's October vehicle sales and production in 16th straight month of decline serves little to help restore such confidence.
And if epoxy's yuan values continue to languish, this will invariably "heighten my buyers' resistance to existing export offers", a northeast Asian epoxy producer conceded.
It may be "an uphill struggle from here", for Asian epoxy makers to defend their current targets, "let alone seek increases to improve margins", another trader highlighted.
On 5 November, FOB northeast Asia assessments for epoxy resins settled unchanged week-on-week in the $2,200-2,500/tonne range, ICIS data shows.
Focus article by Ai Teng Lim
Photo: Construction is a major downstream industry for epoxy resins. (Source: Kohls/imageBROKER/Shutterstock)
($1 = CNY7.00)