Europe August polyols contracts stable

04 August 2010 23:59  [Source: ICIS news]

LONDON (ICIS)--European polyol contract prices remained mainly stable, as underlying short supply was offset by  a number of bi-monthly agreements covering the holiday period, market players said on Wednesday.

In additionr, rigid polyol contracts were fixed for the rest of the quarter, said some buyers. However, this was not widely confirmed on the sell-side.

For flexible polyols, a few sellers reported increases of €20-50/tonne ($26-66/tonne) in August in some cases, depending on starting point, but this was not seen to reflect the general market.

In line with the general sentiment, the ranges remained stable in August between €1,630-1,700/tonne FD  (free delivered) NWE (northwest Europe) for flexible polyols and €1,700-1,780/tonne FD for rigid polyols, according to ICIS.

Numbers either side of the range were also heard, but they were not widely confirmed.

Looking to September, producers were already gearing up for hikes of €100/tonne, citing the ongoing need to recoup previous margin losses and the expected uptick in demand after the holidays.

Customers, however, were set to resist this, on the back of lower feedstock costs and the difficulty in passing on any further increases downstream.

There was an underlying shortness in the European polyol market due to ongoing upstream propylene oxide (PO) limitations, plant maintenance, as well as recent and ongoing production issues.

There were signs of slightly lower demand, particularly in southern Europe. However, little or no slowdown was seen in northwest and central Europe.

The bedding and furniture sector had seen some seasonal dip, with the exception of eastern Europe. The automotive sector continued to hold up reasonably well, despite the holidays, according to sources.

The pull for rigid polyols into the construction industry was seasonally strong due to good weather conditions, said players.

($1 =  €0.76)

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By: Heidi Finch
+44 20 8652 3214

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