Epoxy resins are high-performance thermosetting resins that are most commonly produced by reaction of epichlorohydrin and bisphenol-A (BPA). They have excellent adhesion, chemical and heat resistance, and very good electrical insulating properties.
The main applications for epoxy resins are high-performance coatings, electrical/electronic laminates and adhesives, flooring and paving applications with uses in the automotive, construction and aerospace industries.
Coating applications include powder coatings, marine and protective coatings, can and coil coatings, ultra violet (UV) curable coatings and automotive coatings. The construction industry uses epoxy resins because of their excellent adhesion to steel and concrete. In the electronics sector, they can be used to encapsulate electronic components. A growth area is high-performance composites in the aerospace industry.
MARKET OVERVIEW
Updated to Q2 2021
Asia
Although a series of supply outage occurred across the globe for LER in Q2 2021, the supply in Asia remained overall constant. However, some producers have taken the inter-regional arbitrage opportunity, limiting the volume supplied within Asia, especially since May when Asian regional market softened significantly compared with Q1.
Asian demand was mixed across different regions in Q2. China’s demand for LER turned sluggish, reflecting buyers’ fatigue against firm prices amid squeezed margins in downstream sectors. Demand in southeast Asia also dropped due to the deteriorating COVID-19 situation in Asia, and buyers refrained from engaging in significant forward spot positions. In northeast Asia, demand remained robust and buyers were keen to secure cargoes by paying premiums.
Europe
Although epoxy resins volumes have been strictly allocated in Europe for some time, supply tightened further in Q2 after Hexion’s force majeure at its Pernis site. This reduced already low stocks, ongoing feedstock constraints, import disruption and continued strong downstream demand.
Epoxy resins offtake remained strong in Q2, driven in particular by elevated construction activity. There were certain cases of slowing demand due to high prices, downstream affordability concerns and missing components, but any effect on demand was negligible. Import delays may have boosted demand for domestic players, if they had any spot volumes available.
US
Supply was more available, but product did not flow freely from all corners, with both suppliers remaining under force majeure and allocations. As Q2 ended, volatility subsided and there was no longer that same level of desperation to secure product as there was earlier this year. More imports did come in with unpredictable lead times, but this would have likely been even higher if not for a tight ocean freight market.
Demand into most segments was strong, but the tightness in amine hardeners disrupted some consumption. Peak demand into coatings and construction ran at full throttle, with some seeking additional product to catch up on inventory and meet seasonal growth. This was not easy as some backlogged orders have yet to be fulfilled. Players continued to struggle with tight logistics capacity with a lack of railcars and a shortage of truck drivers.
METHODOLOGY
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
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Epoxy Resins Methodology
Epoxy resins are versatile polymers used in the manufacture of adhesives, coatings (such as industrial and maintenance coatings in oil and gas pipelines), paints and structural parts needed by the automotive, aerospace and aircraft industries.
