Asian TDI March contract nomination to China up $100-200/tonne

SINGAPORE (ICIS news)--Major Asian toluene di-isocyanate (TDI) producers, BASF, KPX Chemical and Mitsui Chemicals nominated their March contract price to China $100-200/tonne (€74-148/tonne) higher than the February settlement amid strong sentiment, sources said on Friday.

Demand from the downstream foam industry had not improved as the traditional peak season would begin in April, players said, adding that higher TDI numbers were based on bullish sentiment rather than market fundamentals.

The March contract price was nominated at $3,200/tonne CFR (cost and freight) China/Hong Kong, they added.

TDI contract prices are finalised at the end of each month.

TDI is used mainly to produce flexible foams for furniture and car seating, and also finds application in integral skin systems and solid elastomers.

February contracts were settled in the range of $3,000-3,100/tonne CFR China/Hong Kong, down $100/tonne from January levels due to weak buying interest ahead of the Lunar New Year holidays, they added.

"We expect market to stay strong in March since many Chinese buyers would eventually need to replenish their depleting inventories from February," a key northeast Asia producer said.

Another northeast Asia producer said: "To settle at this price within this week may be difficult, but domestic prices are on an uptrend, so most likely this price is achievable by the following few weeks."

"Prices in the spot China domestic market are really jumping up, in no time that the import market will follow," a regional trader said.

In south China, talks were closed at CNY27,000/tonne DEL on Friday, market players said.

($1 = €0.74/$1 = CNY6.83)