07 June 2010 10:01 [Source: ICIS news]
SINGAPORE (ICIS news)--Three key toluene di-iscyanate (TDI) producers in Asia have finalised their May contracts $200/tonne (€168/tonne) less than last month's settlements as a result of weak demand from the downstream foam business and the decline in crude values, industry sources said on Monday.
Producers said settlements concluded earlier in May were reported above $2,800/tonne, but the remaining contracts were done at the lower end of the range.
TDI contracts are typically settled at the end of each month, but May contract negotiations had stretched into the first week of June due to the PU China conference in Shenzhen from 26-28 May, sources said.
While May nominations had been announced at $3,000-3,100/tonne toward the end of April, interest from Chinese foam makers was weak due to the availability of lower-priced domestic goods, they added.
“Negotiation was hard. Buyers are practically slashing prices to as low as $2,700/tonne. Our costs are still high. We can’t possibly match those numbers,” said a key producer.
Prices had weakened further due to the recent fall in crude values, the weak global economic situation and increased availability of domestic material in the local China market, according to another producer.
“We managed to conclude business earlier in the month before the spot market continued to slump further, so margin loss was minimised,” said the producer.
In the import market, spot prices were discussed on 7 June at $2,750-2,800/tonne CFR Hong Kong, down $50/tonne from last week, as local traders were heard liquidating stocks ahead of the weak season in foam business, market sources said.
Likewise, on a CFR and CMP basis, discussions were mainly heard in the lower end of $2,750-2,850/tonne, sources added.
In China's northern and eastern markets, prices were discussed at yuan (CNY) 23,400-24,500/tonne ($3,246-3,587/tonne) DEL (delivered) on 2 June, down CNY100-200/tonne week on week.
In southern China, talks were heard stable at CNY23,600-25,000/tonne DEL, according to global chemical market intelligence service ICIS pricing.
($1 = €0.84/$1 = CNY6.83)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|