Asia Sept TDI contracts up $50–100/tonne on strong demand

04 October 2010 07:24  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s September toluene di-isocyanate (TDI) contracts were settled higher, up $50–100/tonne (€36–72/tonne) from August, due to strong demand amid tight availability of the material, industry sources said on Monday.

Major producers BASF and Bayer Material Science concluded their September contracts at $2,400–2,500/tonne CFR (cost & freight) China Main Port (CMP)/Hong Kong, while Mitsui Chemicals settled at $2,450–2,550/tonne CFR CMP/Hong Kong, sources at the companies said.

The higher settlement prices were in line with firm spot prices, according to the producers.

“Our customers are more willing to accept [TDI] prices [at] above $2,500/tonne CFR CMP/Hong Kong. This shows that demand is pretty good,” said a distributor of Mitsui Chemicals.

The tight supply was partly attributed to the recent outage at Mitsui Chemicals’ 200,000 tonne/year TDI facility in Kashima, Japan, market players said. The plant was down from 2-27 September.

In China, meanwhile, a major TDI plant in Caojing was heard to be operating at reduced rates, market sources said.

Supply could be squeezed further due to upcoming turnarounds at TDI facilities in South Korea, they added.

Some downstream buyers, however, said that they were able to negotiate September contracts at $2,400/tonne CFR CMP/Hong Kong – the same price as August contracts. They said that supply tightness was not as severe as smaller local TDI plants in China were operating at high rates.

Spot TDI prices were last assessed at $2,500–2,550/tonne CFR CMP/Hong Kong on 29 September July, up by $20/tonne on the high end of the range on a week on week basis, ICIS data showed.

Meanwhile, subsequent discussions were heard at $2,550–2,650/tonne CFR CMP/Hong Kong, with Hong Kong prices likely to hit $2,700/tonne CFR by end of this week, market players said.

($1 = €0.72)

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Author: Sheau Ling Ong

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