May Europe DINP spot up €20/tonne, but below producer targets

15 May 2009 23:59  [Source: ICIS news]

LONDON (ICIS news)--Europe di-isononyl phthalate (DINP) spot prices have increased €20/tonne ($27/tonne) during May, which is well below the level targeted by producers who are eager to improve their margins, market sources said on Friday.

The price of raw materials needed for DINP production, such as propylene and orthoxylene (OX), have steadily risen since the start of the year.

However, European DINP spot prices have progressively declined, leaving producers with ever-decreasing margins.

Following a further €23/tonne increase in the May propylene contract price and the €20/tonne hike in OX in April, DINP producers said they were determined to claw back margins during May and announced price-rise targets of around €40-60/tonne.

But so far in May, DINP spot prices have increased just €20/tonne at the low end, creating a range of €940-960/tonne FD (free delivered) NWE (northwest Europe), according to global chemical market intelligence service ICIS pricing.

Higher increases were reported on the sell side, but these were not confirmed by other market participants.

One DINP producer said that the bulk of its May freely negotiated business had been agreed at an average increase of €30/tonne over April levels, taking its prices to around €980/tonne FD NWE.

“We told our sales people that every producer is more or less at reduced production and, on the other hand, raw material prices are slightly increasing and product prices have been decreasing since last year,” said the seller.

“It was necessary to improve the margins.”

Another producer, which reported increases of around €20-40/tonne achieved in its freely negotiated business, mirrored these sentiments. It now reported spot numbers in the range of €960-990/tonne FD NWE.

“All the raw materials are increasing and that is why we have to increase prices,” said the producer.

Buyers and traders, however, did not confirm the spot prices reported by producers.

A DINP buyer said it had agreed to pay just over €10/tonne more in May for its freely negotiated business.

“Suppliers were saying about higher propylene and OX, and also there seems to be a bit of movement in the market,” said the buyer, justifying the higher price paid.

The buyer source added that its own demand had surged for May and June, so additional volume was required.

Another buyer said it had achieved a rollover for its freely negotiated volumes in May. The buyer said its consumption was steady this year, although overall in the market it was clear that volumes were down.

Traders said spot DINP was still available at prices well below the levels discussed by producers.

DINP is a plasticiser that is commonly used in polyvinyl chloride (PVC).

DINP producers in Europe include BASF and Polynt.

($1 = €0.73)

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By: Carl Roache
+44 20 8652 3214

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