Asia epoxy resins exports steady but sellers cautious

SINGAPORE (ICIS)–Export discussions for epoxy resins in Asia were range-bound this week, with trade liquidity well supported by perceived requirements from China.

But as the new coronavirus (Covid-19) epidemic persisted across Asia, generating at the same time a slew of bearish estimates on regional economic growth, this has also cast some shadows over longer-term outlook for epoxy resins.

This week, materials for February/March shipment were offered at or above $2,400/tonne FOB (free on board) NE (northeast) Asia, market sources said.

Buyers’ response was “encouraging” too, a seller said, with China remaining a key target customer.

Many epoxy resins plants in the country are still down, leaving a sizable supply gap for imports to fill. Regional suppliers are also eager to sell into China, where buyers have been more receptive to their current asking prices, which are deemed competitive vis-a-vis domestic products.

Even though shipments to China have not recovered fully as yet, with shipping logistics and port operations in China still evolving with the anti-coronavirus measures, sellers said they have secured more bookings from other regional outlets in the meantime too.

But further out, some sellers are somewhat more sanguine about demand prospects, mindful about how fragile this may be if the current battle against coronavirus spread turns out to be more protracted than necessary.

Already, there are various warnings about global GDP stagnating, and if so, it would not bode well at all for any sustained recovery of the embattled automobile and construction sectors, both of which are traditional major downstream applications in the region for epoxy resins makers.

For instance, vehicle production and sales in China, the world’s largest automotive market, have steadily contracted for two full years, with no end in sight as yet, judging from latest statistics for January.

“It is still not time for celebrations,” a regional epoxy maker noted, even if current epoxy export prices have risen.

On 11 February, spot prices averaged at $2,415/tonne FOB NE Asia, up 7% higher than December levels, based on ICIS data.

Focus article by Ai Teng Lim

Photo: Workers perform disinfection at the workshop for medical N95 masks at a mask production company in southwest China’s Chongqing. (Photo by CHINE NOUVELLE/SIPA/Shutterstock)

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