HOUSTON (ICIS)–The fourth quarter has started on a quiet note for the US epoxy markets, with prices staying flat from the previous month.
This comes as supply and demand fundamentals remain largely balanced, with nothing on the horizon to shift the markets dramatically.
“Pricing was a rollover across the board,” a source said.
Despite an ongoing outage, no adverse impact to supply has been indicated, even from small volume buyers purchasing material without contracts.
A turnaround is underway at an US epoxy resin plant. The turnaround is scheduled to run from late-September to mid-November.
Meanwhile, domestic demand has been relatively healthy this month, but is expected to taper in line with seasonal trends starting next month.
“Demand is stable and we have not seen any further reduction in pricing,” a source said.
Also, the US housing market has likely reached an inflection point because of rising costs for materials, labour and land as well as higher mortgage rates.
Epoxy resins has many downstream applications, including coatings, construction, automotive and civil engineering.
Meanwhile, offer levels for spot import material continue to be quoted in the mid-to-upper-$1.30s/lb ($2,866/tonne), mostly holding steady from last month.
While costs have not moved down too much, buyers are still actively sourcing imports, according to market information.
“Imports still look pretty enticing than domestics,” a source said.
Demand in Asia is heard to be softening due to a seasonal lull in the region and an inventory buildup that took place before the holidays.
The expected direction of prices in Asia is mixed as while upward pressure could come from rising feedstock costs, downward pressure could come from relaxed anti-pollution measures.
Looking ahead, slower domestic demand from seasonality, along with slower Asian demand from a softer economy amid trade tensions, could bring about price decreases.
But the magnitude of decreases would not be large enough to bring prices down to levels seen at this time last year. Domestic epoxy contracts are 35 cents/lb higher from this time last year.
US October epoxy contracts were not assessed this week, pending wider confirmation.
ICIS had assessed the US September liquid epoxy resin contract price at $1.54-1.59/lb ($3,395-3,505/tonne) DEL (delivered) North America.
Major US epoxy resin producers include Hexion, Huntsman and Olin.
Focus article by Tarun Raizada
Pictured above: epoxy putty (Sipa Press/REX/Shutterstock)