Producer sees no Europe TDI automotive slump

15 October 2008 16:28  [Source: ICIS news]

LONDON (ICIS news)--A producer hit out on Wednesday over talk of a market downturn for European TDI following recent production cuts in car manufacturing.

 

“People are making a lot of hot air out of the situation. I have seen no drop in demand,” a source at the producer said.

 

Temporary production cuts announced by BMW and Opel in Germany and Fiat in Italy last week led to market talk of a negative impact on the European TDI industry.

 

A buyer said the effects of the closures had yet to be seen, adding that demand in the furniture industry remained stable.

 

Another buyer agreed: “Customers still need furniture and household goods such as mattresses, but there is a growing amount of uncertainty because of the economic situation.

 

“Customers will probably wait to make purchases so we might see a slight downward trend in the market,” the buyer added.

 

TDI prices had been falling quite significantly in Africa as a result of greater volumes of Asian product being sold in the region.

 

“Falling prices in Africa could be the first signs of a potential downturn in Europe, but it is still far too premature. We have seen no sign of material moving towards Europe,” the producer said.

 

TDI contract prices have rolled over since August and are currently in a range of €2,855-3,055/tonne ($3,883-4,155/tonne) FD (free delivered) NWE (northwest Europe), according to global chemical intelligence service ICIS pricing.

 

The main outlet for TDI is in the manufacture of polyurethane (PU) flexible foams used in upholstery, mattresses and car seats. It is also used in coatings and elastomers.

 

($1 = €0.73)

 

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By: Stuart Moir
+44 20 8652 3214

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