12 August 2010 11:01 [Source: ICIS news]
LONDON (ICIS)--Dow announced on Thursday that it will hike prices of all polyols, methyl diphenyl isocyanate (MDI) and polyurethane systems by up to €200/tonne ($256/tonne), effective immediately or as contracts allow.
“It is clear margins are not where they need to be, as we have had to take the heavy burden of costs in the first half of the year,” a company source said.
The polyols and MDI markets were seen as short by market players, amid high demand and ongoing production outages, which the source said would help Dow to push through the increases.
Customers, on the other hand, said a €200/tonne spike was excessive, as the market was only marginally on the short side, if at all.
One MDI buyer added that it would be very difficult to pass on these costs, since prices had already increased by €230-260/tonne since March, according to ICIS data. Currently, crude MDI was valued at €1,700-1,770/tonne FD (free delivered) NWE (northwest Europe).
“€200/tonne is simply not realistic; a rollover or slight increase is more likely,” a buyer said.
($1 = €0.78)
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