19 August 2009 22:45 [Source: ICIS news]
HOUSTON (ICIS news)--US methyl di-p-phenylene isocyanate (MDI) prices rose during August due to sharp increases in feedstock benzene, buyers and sellers said on Wednesday.
Producers nominated price increases for July and August in an effort to ease squeezed margins.
“No one expected benzene to settle as it did,” another producer said.
Contract prices for benzene, an MDI feedstock, have more than tripled since the beginning of 2009.
US benzene contract prices for July were $3.65/gal FOB (free on board) USG (US Gulf), compared with January values of $1.01/gal FOB USG.
Apart from higher feedstock costs and soft demand this year, producers have also faced higher fixed-cost-per-unit ratios, which prompted production-rate reductions and closures.
Bayer MaterialScience said their global MDI production was running at 60% of nameplate capacity. The company recently announced that it would close a small MDI plant, but would not comment further on the closure.
Isocyanates are feedstock chemicals used in the production of polyurethane (PU) foam.
Major US isocyanate producers include Dow Chemical, BASF, Bayer and Huntsman.
($1 = €0.71)
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