US TDI price hike for June likely - sources

26 May 2010 21:53  [Source: ICIS news]

HOUSTON (ICIS news)--Toluene di-isocyanate (TDI) prices were likely to increase in June, although the amount to be implemented remained uncertain, market participants said on Wednesday.

Suppliers proposed 1 June hikes at two levels - 15 cents/lb ($331/tonne, €268/tonne) and at 10 cents/lb, depending on the supplier.

TDI producers cited the need to recover margins, which thinned earlier in the year, when prices could not keep up with rising feedstock and energy costs, according to sources.

Polyurethane foam manufacturers said the initiatives appeared firm and implementation was likely, with the most probable settlement at plus 10 cents/lb.

Industry sources indicated that the supplier proposing the higher 15 cent/lb boost was determined to fully implement the increase. Market talk suggested that the supplier might lose some business as a result of the larger price increase, but that buyers would continue to order some of the more expensive material to secure supply in case of an emergency.

TDI consumers said the increases would hurt demand at a time when it was less than stellar. On the other hand, some participants have noted moderately rising demand, particularly from the automotive sector, and to a lesser degree from the furniture and bedding markets.

Isocyanates, together with polyols, are raw materials in the production of polyurethane foams.

ICIS pricing assessed US TDI prices at $1.48-1.65/lb delivered in bulk.

US TDI suppliers included BASF, Dow Chemical and Bayer MaterialScience

($1 = €0.81)

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By: Ron Coifman
+1 713 525 2653

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