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7th January 2014
Epichlorohydrin (Europe) Editor: Editorial Editor: Editorial Europe,
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Click for Price History FD NWE (BULK)DEC
EUR/TONNE
CONTRACT PRICES Price Range -30 1620-1640
-30
One year ago 1610.00-1640.00
US CTS/LB 99.95-101.18
NOTE: for full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”. “methodology”. Europe January ECH price talks ongoing The European epichlorohydrin (ECH) market is quiet as many sources still have not returned from vacation, though players who have already returned to their desks are currently negotiating January prices and ideas currently range from a rollover to a €20/tonne i ncrease, due to higher feedstock costs. In January, the European propylene contract price settled up €20/tonne to €1,130/tonne. One ECH producer said it had initially sought a €30/tonne increase on ECH, but did not find any buy-side support as demand is low. It is now looking at a €20/tonne increase. Another ECH producer also said it would be looking for a €20/tonne increase, while a third producer said January will probably settle at a rollover from December. Several market sources said the market is currently fairly quiet as market players slowly return to work and they do not expect January price negotiations to take place in earnest until next week. An ECH buyer said it cannot afford a price increase in January as it has already settled its downstream prices and cannot pass on the higher costs. Nevertheless, it plans to raise its prices in February. Looking ahead to February, two ECH producers indicated that due to several months of margin erosion which have led to significant losses, they will be seeking to sharply raise ECH prices. Several players said they expect feedstock costs to rise further in February and this could help support a sharp ECH price increase. One producer said that a triple digit ECH price hike for February may be likely as losses are running into millions of euros. Another said it plans to focus on margin recovery over market share.
Although major Chinese producers have kept their offers unchanged at yuan (CNY) 11,500-12,000/tonne CFR CMP, current weak demand is unable to support soaring prices, market players said. China domestic prices have surged by 19% since endNovember, amid weak demand for downstream epoxy resins in the year-end lull. Market activity is expected to be subdued from one week ahead of the Lunar New Year holiday, which falls from 31 January to 7 February in China, as most downstream Chinese epoxy resins plants would be shut during this period, market sources said. Upstream Supply in the European propylene market last week was viewed as tight, following some strike-related stoppages, an unplanned cracker outage in France, and a fresh focus on lighter feedstock cracking by some producers. Demand was better than expected as players sought alternative supplies to cover the hiccups in supply amid a general restocking of inventories. Additionally, unplanned supply constraints have hampered some producers' preparations to cover upcoming maintenances.
Month
Europe Propylene Contract FD NWE
November 2013 €1080/tonne December 2013 €1110/tonne January 2014 €1130/tonne
Asia China's domestic ECH spot prices are showing signs of stabilising as expected, after its four-week consecutive uptrend came to a halt amid subdued trade.
Covering edtor: Iain Packham
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