SINGAPORE (ICIS)--Asian export offers for epoxy resins are firm as sellers sought to protect margins, and might be under further upward pressure if feedstock prices do not ease soon.
Upbeat economic data for key outlets like China bolstered sellers’ confidence that demand support for epoxy resins would strengthen moving forward.
This week, epoxy resins cargoes were indicated at minimally $2,300/tonne FOB (free on board) northeast Asia, with some October shipment transactions heard done at this level.
Epoxy resins prices averaged at $2,250/tonne FOB NE Asia on 6 October, ICIS data shows.
Regional epoxy resins makers have had to grapple with stiff costs, as CFR (cost and freight) China prices for feedstock bisphenol A (BPA) surged by 26% within weeks, from below $1,150/tonne in late August to well over $1,400/tonne by mid-September, according to ICIS data.
Even for co-feedstock epichlorohydrin (ECH), there was no respite either, as ECH prices also jumped up in the same period by about $75/tonne, on a CFR China Main Port (CMP) basis, ICIS data shows.
As ECH and BPA supplies could stay tight for some time on production constraints, “prices for these products may not come off so soon,” an epoxy resins maker lamented, adding that “this also means I have to keep pricing epoxy up to protect my bottom line.”
While there is some resistance from buyers, many regional epoxy makers are optimistic about demand prospects.
One sentiment booster is the improved September performance indicators for various Asian manufacturing economies.
For instance, China – the region’s economic powerhouse – saw a stronger-than-expected 51.5 reading for its September official purchasing managers’ index (PMI).
Other major outlets, from Japan, South Korea to India, also returned with similarly upbeat performance.
“This suggests that the worst is over, and regional epoxy off-take could benefit once downstream production takes off steadily from here,” a seller said.
Focus article by Ai Teng Lim
Photo: Yangshan port in Shanghai, China (Source: Uncredited/AP/Shutterstock)