Global Demand for Epoxies Significantly Improving

19-Nov-2002

The Dow Chemical Company today confirmed that the overall global consumption for epoxy resins has improved steadily since the beginning of 2001, to the extent that the gap between demand and supply has closed considerably. Demand for raw materials in the coatings industry has grown consistently at trend levels. Meanwhile demand in electronics, an area hit hard in 2001 following an over-inflated 2000, has returned to that of the first quarter of 2000.

"Overall, though the market has seen improving demand, epoxy producers are still struggling to restore profit margins to reasonable levels," says Phil Cook, global vice president for Epoxy Products & Intermediates at Dow. "Feedstock prices jumped considerably this year, putting everyone under tremendous pressure to increase epoxy prices. We anticipate a significant increase in epoxy pricing in the first quarter of 2003 in all geographies."

According to Cook, the steady decrease in oil, gas and other petrochemical pricing since 1995 and the resultant more or less steady declines in epoxy resin prices motivated some major epoxy resin consumers to develop lengthy contract terms with their customers. This has contributed to the difficulty epoxy manufacturers have experienced in securing much needed price increases and has contributed to the loss of margin. Consequently, the epoxy producers have insufficient margins to absorb the recent jumps in feedstock prices.

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