News Code : 45245

 

Petrotahlil -Asian spot discussions for epichlorohydrin (ECH) continued to edge up this week, supported by ongoing tightness in prompt supplies.

However, the bullish sentiment seems to have started to waver somewhat, market sources said, now that several regional plant maintenance are wrapping up, which could turn the supply situation around.

This week, domestic ECH trades in China were largely around the yuan (CNY) 11,000/tonne mark, or higher, on DEL (delivered) east China basis, market sources said.

This was CNY500/tonne higher than the low end of the DEL east China ICIS assessments on 8 September.

ICIS data also shows that the average DEL east China prices had gained more than 20% in the last few weeks, climbing from a four-month low of CNY8,950/toone in early August to CNY10,900/tonne in the week ended 8 September.

“Domestic epoxy makers are rushing to secure volumes and restock adequately before the extended National Day holidays begin in early October,” a trader said.

Prompt supplies were tight in China as supplies from the major 130,000 tonne/year Jiangsu Haixing plant were heard still unavailable for sale, sources said. The plant operations were cut in early August on technical grounds.

The robust domestic trades have also boosted talks for US dollar-denominated imports, with some Asia-origin cargoes heard sold this week for October shipment at about $20-30/tonne higher week on week, on a CFR (cost & freight) China Main Port (CMP) basis, market sources said.

CFR CMP prices averaged $1,310/tonne on 8 September, a 9% increase from levels seen in early August, ICIS data shows.

Selling indications from regular ECH suppliers outside of China were firm, as spot availabilities have been tightened by a spate of plant turnarounds in July-August.

However, a regional buyer said: “It may be a matter of time before the regional supply situation turns around.”

“I will not rush into new purchases now if I can help it,” the buyer added.

Within China, some new production lines may come onstream in the coming month, after the extended holidays are over.

This includes a proposed 60,000 tonne/year expansion to the 60,000 tonne/year Shandong Minji line in China, market sources said.

A trade said Jiangsu Haixing may have fully recovered its operations as well by then, noting that the plant has been making steady progress in resolving the technical issues.

Supply is also poised to improve with the 100,000 tonnes/year Formosa Plastics plant in Mailiao, Taiwan, returning in mid-September from a month-long turnaround.

Barring any unforeseen shifts in regional demand conditions, “the projected increases in supplies may cool things down for fresh spot discussions,” a trader said.

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Source : ICIS

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