07 September 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European toluene di-isocyanate (TDI) contract prices have dropped by €50/tonne ($69/tonne) on average in September, because of strong competition amid plentiful supply, resulting from new capacity and subdued demand, said market players on Wednesday.
Prices in September are largely pegged between €1,850–1,950/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Larger price drops of €80–100/tonne are also heard in some cases, depending on starting point and contract type, but they are not widely confirmed. One buyer said it had secured decreases ranging from €50–100/tonne, but acknowledges that reductions of €100/tonne were typically for accounts that had been fixed since July on a two-month basis to cover the summer holiday period.
Numbers down to €1,800/tonne FD and up to €2,000/tonne FD were also heard, but they were seen to be exceptions rather than the norm.
One producer contests prices below €1,900/tonne FD, based on toluene feedstock costs, but other buyers and sellers confirmed lower numbers.
Despite this, sellers stress that there is an underlying need to increase prices and restore profitability for TDI, following recent price erosion and feedstock increases earlier in the year. One producer acknowledges that there has been some upstream price relief for toluene in September, but stresses that this is insufficient, as feedstock costs remain high. The same source said that it would need to raise TDI prices by at least €200–300/tonne to recoup previous margin losses.
Consumption from the main downstream bedding and furniture sectors is below traditional expectations for the time of year, which is attributed to reduced consumer confidence amid an uncertain economic outlook.
The TDI market remains long, thought to be due to new capacity in Europe, rumoured imports from
($1 = €0.72)
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