18 March 2010 06:24 [Source: ICIS news]
By Ong Sheau Ling
SINGAPORE (ICIS news)--Prices of flexible slabstocks polyether polyols in China may surge further after jumping nearly 10% this quarter, due to tight supply and strong values of feedstock propylene oxide (PO), market players said on Thursday.
Discussions for March-arrival bulk spot cargoes were at $1,800-1,850/tonne (€1,314-1,351/tonne) DEL (delivered) China this week, up $170/tonne from the start of the year, with another $100/tonne increase likely in April, deterring buyers from downstream foam sector, they added.
Polyols is used as one of the raw material for manufacturing foam that is applied in the mattress and upholstery sectors.
Foam makers should have started buying in large volumes this month in preparation for the traditional peak production season from April to June, said a key producer in ?xml:namespace>
“[But] we are not seeing this, as buyers deemed the current price level as too high,” he said.
“Unless prices taper off, it is hard for us to buy more volumes,” said a buyer based in eastern
The tight supply conditions, however, would likely prevail for another quarter and keep prices of polyols strong. Increased buying would just push the prices higher, market players said.
“Regardless [whether it is] imports or local flexible polyols, in
A two-month shutdown at the polyols facility of key producer – CNOOC and Shell Petrochemicals Co (CSPC) in
Rising feedstock costs was also nudging up polyols prices in
Polyols should be priced at least CNY800/tonne higher than
“Particularly in southern
Spot prices for bulk flexible slackstocks in southern
But the Chinese polyols domestic prices were still lagging behind the US and European values, market sources said, adding that Asian producers were by-passing selling to China in recent months as they preferred to ship material to more lucrative markets in the West.
Cutbacks in US shipments further capped the flow of deep-sea polyols cargoes for March arrival into
“We have little cargoes to sell in March, and we have no idea whether we will be allocated with more cargoes in April because the upstream propylene cost in the
Supply was also tight in Europe, partly due to the force majeure on Shell Chemical’s ethylene (C2), propylene (C3) shipments from Moerdijk in the
Spanish producer Repsol, meanwhile, had indefinitely idled its
“As a seller, we would rather cater to the more profitable European market than
($1 = €0.73 / $1 = CNY6.83)
Read John Richardson and Malini Hariharan's Asian Chemical Connections blog
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