Asia TDI falls 3% on weak demand, China also dips

17 December 2007 10:58  [Source: ICIS news]

SINGAPORE (ICIS news)--Spot toluene diisocyanate (TDI) prices in Asia fell about 3% compared with last week due to persistently weak buying interest, traders said on Monday.

Prices are now around to $4,100-4,200/tonne CFR (cost and freight) Hong Kong. Importers have been refraining from booking new cargoes in the past weeks for fear that prices would fall further, the traders said.

Regional prices have been falling since the end of November as the tight regional supply eased following the restart of BASF's Shanghai line in early November, they added.

“People tend not to buy in a falling market,” one of the traders said in Mandarin.

The unexpected outage of Mitsui Chemicals Polyurethanes’ TDI plant in Ohmuta, Japan, failed to lift regional market sentiment, a second trader said.

High spot TDI prices have squeezed the margins of many small and medium-sized polyurethane foam plants in Asia in the past months, and these plants have reduced operating rates which in turn dampened TDI demand, the second trader said.

Average regional spot TDI prices have fallen around 6.7% from the end of November when they were at around $4,400-4,500/tonne CFR China/Hong Kong, according to global chemical market intelligence service ICIS pricing.

TDI prices in the China domestic market also fell below the yuan (CNY) 40,000/tonne ($5,420/tonne) delivered psychological level this week on weak demand, local distributors said.

Discussions were hovering around CNY39,700-41,500/tonne delivered, CNY1,000-1,300/tonne lower from last week, the distributors said.

Vera Huang contributed to this story

By: Chow Bee Lin
+65 6780 4359

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