US August epoxy steady-to-soft but imminent tariffs could slow downtrend

HOUSTON (ICIS)–US August epoxy sentiment remains steady-to-soft, but upcoming tariffs on imports could slow down the downward trend in prices.

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Competitively priced imports, along with steady domestic supply, have placed downward pressure on the markets over the last two months.

But domestic prices may not fall too much this month from current levels due to more balanced supply and demand conditions.

Downstream consumption into paints and coatings has been healthy during peak activity in the construction sector.

But no major increase in demand is on the horizon with the end of the high season around the corner.

China said it will begin imposing 25% tariffs on $16bn of US goods starting 23 August as part of the second wave of tariffs.

However, the revised list does not include epoxide resins (harmonised code 39073000). The original list put out in June had included US imports of epoxy.

But the updated US tariff list continues to include Chinese imports of epoxy, with the 25% tariff set to go into effect 23 August.

The tariffs could have an immediate short-term impact as buyers of Chinese material scramble to find alternative sources.

A source said this could create leverage for domestic suppliers as Chinese material ends up being diverted to other regions such as Europe.

But it could also create space for suppliers in other countries, such as South Korea and Thailand, to increase their exports to the US.

ICIS had assessed the US July liquid epoxy resin contract price at $1.56-1.61/lb ($3,439-3,549/tonne) DEL (delivered) North America.

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