Europe BPA outlook unclear amid contrasting feedback

13 June 2014 16:06 Source:ICIS News

LONDON (ICIS)--Feedback from the European bisphenol A (BPA) market was highly varied as buyers and sellers on Friday offered contrasting views with respect to both current fundamentals and expected developments for July.

Prices decreased substantially last week, and buyers insist the market remains oversupplied, suggesting that sellers will need to offer even lower spot prices if they are to secure sales in July.

With a plant in northeast Asia having recently restarted, a significant increase in availability of Asian imports is understood to be a key factor behind the market length.

One buyer, however, feels prices are unlikely to decrease further, despite agreeing the market is well supplied. The reasons given were the fact that prices are already at relatively low levels, and that the strengthening dollar versus the euro makes imports less competitive.

This buyer indicated Asian import prices at low levels, at around $1.70/kg CIF (cost, insurance and freight), equivalent to €1,258/tonne CIF.

Delivery costs were estimated at €60/tonne, giving a delivered price of €1,318/tonne. Other sources said spot prices are generally in line with the ICIS published assessment of €1,350-1,450/tonne FD (free delivered) NWE (northwest Europe).

Another buyer said it expects benzene prices to decrease further next month, putting more pressure on BPA prices.

Contrasting views were offered buy sellers, who see that market as either balanced or short.

One producer said it has had to turn away customers because of a lack of available product, although it added that this is because it has increased its own polycarbonate production. Nevertheless, it felt this shortage would spread to the wider market, and that any further price decrease are unlikely as a result.

A distributor said material is being exported from Europe to the US, where two producers have announced force majeure, and expected this to begin tightening the European market in the next one to two weeks, giving support to prices.

Furthermore, with prices in China rising, increased  supplies will be drawn there from Korea, meaning fewer exports to Europe and additional support for European prices.

By Ross Yeo