US June epoxy resin contracts decrease as availability improves

HOUSTON (ICIS)–US June epoxy resin contracts were assessed at a decrease of 6 cents/lb ($132/tonne), the first decrease for epoxy contracts since September 2017, after the difficult situation seen over the previous two quarters.

ICIS assessed the US June liquid epoxy resin contract price at $1.61-1.66/lb DEL (delivered) North America.

Price decreases lower and higher than the final assessment were also heard in the market.

“There was some downward pressure this month,” a source said.

Some sources were expecting a shift or a correction in prices after the volatility experienced earlier this year.

But downstream vinyl ester resin (VER) remains under pressure from high feedstock epoxy costs, leading two VER producers to separately seek price increases of 4-6 cents/lb for July.

The overall availability of epoxy has improved significantly, a turnaround from tight supply conditions two months ago.

“Supply is fine. There are no concerns about getting material,” a source said.

The domestic supply picture is healthy, while imports from Asia are available in greater quantities.

Demand has received a boost from seasonality in the paints and coatings sector.

However, this is being countered by some buyers who are moving to the sidelines given current pricing trends.

“I am holding off on buying more material,” a source said.

Spot import prices remain elevated, with material quoted in the low $1.40s/lb.

But more and more market participants are seeing offers come down closer to the $1.40/lb level.

Imports placed downward pressure as Asian players continue to push material into the US at increasingly competitive prices, pushing domestic offers down.

This comes as Asia spot epoxy prices have fallen $250/tonne from their peak in early February.

Looking ahead, some sources expect domestic prices to continue falling in July as the markets get longer with additional supply possibly coming from imports.

The market expects domestic prices to return to more reasonable levels by the end of the third quarter.

However, prices in Asia may not fall much further, as rising feedstock bisphenol A (BPA) costs pressure margins.

Major US epoxy resin producers include Hexion, Huntsman and Olin.

Focus article by Tarun Raizada