10 June 2009 19:50 [Source: ICIS news]
The increases could be a few cents/lb, buyers said.
“Polyol and MDI [methyl di-p-phenylene isocyanate] prices are probably moving up,” a market player said. “In TDI [toluene di-isocyanate] it is doubtful because US prices are still higher than the rest of the world.”
Propylene, a feedstock used in polyol production, had an initial June contract settlement increase of 8.5 cents/lb ($187/tonne or €133/tonne) over May numbers, a producer and a number of buyers said.
If the contract fully settled at the 8.5-cent/lb increase, then chemical grade propylene (CGP) would jump to 38.5 cents/lb.
Benzene and toluene, aromatic chemicals derived from crude-based naphtha and used as feedstock for TDI and MDI, have tracked rising oil prices and reported significant price increases since the beginning of the year.
NYMEX light sweet crude for July delivery settled at $70.01/bbl on 9 June, up $1.92 and up 51% from the $46.34/bbl settlement on 2 January.
Many producers have nominated isocyanates price increases, effective on 1 July.
Dow Chemical announced a price increase proposal of 8 cents/lb for MDI, TDI and copolymer polyols at the end of May.
Buyers said BASF had also issued price increase proposals, but the producer did not immediately respond to requests for comment.
Huntsman announced proposed increases of 5 cents/lb for MDI, propylene oxide (PO) and propylene glycol (PG).
“This price increase is necessary to address the recent significant escalation in our raw material costs,” said Greg Geaman, the vice president of Huntsman’s polyurethanes division for the Americas.
Asian demand helped drive up US benzene prices, traders said.
US spot benzene surged by more than 16% in June to $2.79-2.84/gal DDP (delivered, duty paid) HTC (Houston-Texas City) on the back of stronger energy and Asian demand for styrene imports, according to data from global chemical market intelligence service ICIS pricing.
Chemical industry players agreed that production rates were low across the sector, and downstream demand remained weak.
Major US isocyanate producers include Dow Chemical, BASF, Bayer and Huntsman.
($1 = €0.71)For more on MDI or TDI, visit ICIS chemical intelligence
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