Europe Sept MDI, rigid polyol contracts rise on market strength

08 September 2010 16:43  [Source: ICIS news]

LONDON (ICIS)--European crude methyl di-p-phenylene isocyanate (MDI) monthly contract prices firmed in September, driven by increasingly short supply and buoyant demand into the construction sector, sources said on Wednesday.

“The market is over a barrel to accept increases [in view of strong market fundamentals],” said one MDI manufacturer.

One crude MDI customer said: “If you want material, you will pay any price,”

A second crude MDI buyer said “It is a sellers’ market. We expect limited availability for at least the next few months.”

MDI supply was constrained, particularly for crude MDI due to a number of production problems and current/forthcoming planned maintenances, along with seasonally healthy demand in the construction/insulation sectors, sources said.

Price increases for crude MDI ranged from €30-200/tonne ($38-253/tonne), but with some consensus between plus €50-100/tonne.

As a result, the crude MDI range for September was assessed between €1,750-1,900/tonne FD (free delivered) NWE (northwest Europe).

Numbers either side of the monthly range were heard in a few cases, but they were not widely confirmed.

For crude MDI quarterly accounts, price remained unchanged in September, but with hikes of €200/tonne targeted by sellers on the back of limited availability, good demand and the need for margin recovery.

For pure MDI, sources reported price increases from €50-150/tonne in September, driven by balanced-to-short supply. Sellers reported prices from €1,900-2,000/tonne FD, although the buy-side questioned whether €2,000/tonne had been achieved yet. Some buying and selling sources considered prices in the mid-to-upper €1,900s/tonne FD as more realistic for high-end business.

As a result the range was changed to €1,900-1,975/tonne FD NWE, an increase of €50-75/tonne from August.

Similar to its crude MDI co-product in rigid foam production, sucrose base rigid polyol prices also trended upwards in September, according to some players. This was driven by healthy construction demand and balanced-to-short  supply.

Prices were mainly heard between €1,750-1,800/tonne FD NWE. This represented increases of €20-50/tonne. Numbers either side of the range were also heard, but they were not widely confirmed.

For more on MDI visit ICIS chemical intelligence
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By: Heidi Finch
+44 20 8652 3214

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