Players anticipate Europe ECH price rollover in December

26 November 2013 23:59 Source:ICIS News

LONDON (ICIS)--Players in the European epichlorohydrin (ECH) market on Tuesday said they are generally anticipating a rollover in December prices despite weak demand and a long market, due to concern over higher feedstock costs and the need by producers to protect thin margins.

Market players are closely watching propylene to gauge the direction of potential feedstock cost moves.

Nevertheless, most sources are expecting a rollover for December ECH prices.

Competition from Middle East and Asian imports is putting downward pressure on European ECH prices, although as December is traditionally the quietest month in the year for demand, domestic European producers are unlikely to compete on a price basis for the relatively low volumes.

The expectation is that prices could rise in January if feedstock costs go up in December.

“Indirect competition from imports of epoxy has reduced demand for European production. This has generated a lengthening of the market in Europe,” a producer said.

“We see the prices are softer than should be, based on the usual margin between costs and the market price,” said another producer.

Nevertheless it is seeking a rollover for December prices. “We see nobody wants to buy too much in December. We see more demand in the start of January,” it added.

By Iain Packham