Higher costs, weak demand cloud pricing in US polyester polyols

19 August 2009 21:44  [Source: ICIS news]

HOUSTON (ICIS news)--Rising feedstock costs could drive price increases for US polyester polyols, although some market participants expect weak demand would deter any hikes, players said on Wednesday.

One source said two consecutive increases for feedstock diethylene glycol (DEG), with more expected in the near future, would likely prompt price hikes in the near future.

Indeed, US DEG prices for September were nominated at increases of 5-7 cents/lb ($110-154/tonne, €78-109/tonne), a trader said.

The proposed increases followed July hikes and August price proposals of 3-5 cents/lb. The August increases were going through, and the September proposals would likely succeed as well, the trader said.

However, other market participants were sceptical that polyester polyol prices were on an uptrend, as sales volumes were described as weak.

“The summer [building] up-tick is over and August has been extremely quiet,” a source said.

Polyester polyol bulk delivered transaction prices were $1,984-2,293/tonne, according to data from global chemical market intelligence service ICIS pricing.

Major US polyester polyol producers include Oxid, Stepan and Invista.

($1 = €0.71)

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