Bayer seeks €5/tonne increase for Europe HCl in 2010

30 October 2009 16:40  [Source: ICIS news]

LONDON (ICIS news)--Bayer MaterialScience has announced an increase of €5/tonne ($7/tonne) for its annual hydrochloric acid (HCl) contracts, effective from January 2010, amid a tight supply/demand situation, company and market sources said on Friday.

“We are proceeding with plus €5/tonne from 1 January 2010 and this is explained by the current supply/demand situation,” a source at Bayer said.

HCl availability has been hit this year by reduced isocyanate and chlorine-derivative production, while at the same time demand has only declined from the steel sector, with other end-use demand remaining steady.

Other suppliers said they would also seek increases for contracts in 2010.

One German producer said it was looking for rollovers on its already high-priced contracts as well as increases of €2-5/tonne on low-priced contracts, while other producers based in northwest European said they would seek increases closer to €10/tonne.

Some market sources said that. in reality. a targeted increase of €5/tonne or below could end up as a rollover once negotiations with customers had taken place.

Contracts for 2010 were expected to be concluded before the end of the year, although some could run over into January, market sources said.

HCl prices in Germany are currently assessed at €60-85/tonne FD (free delivered), according to global chemical market intelligence service ICIS pricing.

HCl can either be produced by burning chlorine or as a by-product of various chlor-alkali and fluorocarbon processes as well as potassium sulphate production.

($1 = €0.67)

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By: Rebecca Clarke
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