Europe TDI prices likely to firm due to output issues - sellers

17 February 2010 18:16  [Source: ICIS news]

LONDON (ICIS news)--Production issues and upcoming plant maintenance projects at European toluene di-isocyanate (TDI) plants are likely to push up prices in March, sellers said on Wednesday.

Other justifications for a possible uptrend included the need for margin recovery and the forthcoming closure of Dow Chemical’s TDI facility at Freeport, Texas, in the US, according to sellers.

Sellers said they were targeting price hikes of €150-250/tonne ($205-342/tonne).

Buyers, however, said they were sceptical about the possible effects of production issues on pricing.

One customer said it had already agreed with a few suppliers a rollover for TDI in March, prior to talk of production issues in eastern Europe, but said it was too early to say what the effects of the production issues would be.

“It’s getting tougher. It depends on demand. If demand slips away, not much will happen [despite the production issues]. If March is a strong month [for demand], as it should be, then there would be a problem [for supply and pricing],” said one customer.

Another buyer said it already had quarterly agreements for TDI and said it would not see any increase until April at the earliest.

The source, however, questioned whether increases would be achievable, given that demand across Europe’s bedding and furniture sectors was weakening during February, adding that it did not see any availability issues.

There was some speculation among players that a few plants in central and eastern Europe had experienced, or were currently experiencing, some mechanical issues.

One of the units had reported lost some production days in January and February, and the other plant had unexpectedly shut down on 16 February due to technical difficulties.

In addition, Perstorp said it would bring forward a maintenance shutdown at its France-based TDI unit by one month due to the need for a mechanical revision.

The turnaround, which was previously scheduled to take place at the end of March, was now expected to take place in late February, according to a company source.

The same source said that it was implementing a strict sales control in March, particularly as it was preparing for its major turnaround in May, which was expected to last for approximately four to five weeks. 

European TDI contract prices were assessed in February at €2,100-2,200/tonne FD (free delivered) NWE (northwest Europe), according to global chemical market intelligence service ICIS pricing.

($1 = €0.73)

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By: Heidi Finch
+44 20 8652 3214

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