China TDI trade stalls on Olympic curbs

30 July 2008 05:44  [Source: ICIS news]

SINGAPORE (ICIS news)--Toluene diisocyanates trade in China has stalled due to logistical restrictions on dangerous goods imposed by the government to prevent major mishaps during the Beijing Olympic Games, Asian TDI traders and producers said on Wednesday.

The port authority in Guangdong province in southern China had not formally announced the (logistics) restrictions as the province would not be hosting any Olympic events, but shipping companies had been advised informally about the curbs, local shipping agents said.

"The Guangdong government wouldn’t want anything negative to happen on their watch during the Games," one of the shipping agents said in Mandarin.

TDI imports from various major sources such as Japan and South Korea are trans-shipped from Hong Kong to mainland China via several ports in Guangdong including Huangpu and Sekou.

Some shipping companies had turned away vessel bookings for July due to the restrictions, a Japanese trading company said, adding that one-third of its July shipments had been cancelled as a result.

Two key TDI producers in South Korea said they were not offering August shipment to China as importers had no choice but to wait on sidelines due to the logistics issue.

"We’re not offering to China now because there are no enquiries," a South Korean producer said.

A key Asian producer had rolled over its July offers at $4,500/tonne CFR (cost and freight) China for August, but it said buyers’ response was lukewarm.

Land transportation of TDI in China had also been under exceptionally close scrutiny, which discouraged buying in the domestic market causing a drastic fall in prices since early June, local distributors said.

Offers of TDI were pegged at yuan (CNY) 36,000-39,000/tonne ($5,271-5,710/tonne) in north and east China this week, CNY500-3,000/tonne lower from last week.

Distributors in south China raised offers by CNY500-1,000/tonne to around CNY37,500/tonne this week, in their efforts to recover losses made in the past weeks, but the higher offers attracted no buying interest, the distributors said.

Traders in the Hong Kong spot market also raised offers to $4,300-4,500/tonne CFR this week, $100-200/tonne higher from last week’s transacted levels, but the higher offers also failed to entice buying interest, Asian traders said.

Key TDI producers in Asia include Cangzhou Dahua in China, Korea Fine Chemical and BASF Urethane Korea in South Korea and Mitsui Chemicals Polyurethanes in Japan.

TDI is a raw material for making polyurethane foams used in various application sectors, including automotive and furniture.

Vera Huang contributed to this article

($1 = CNY6.83)

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