FocusMideast, Africa isocyanates fall on weak overseas markets

15 September 2011 06:45  [Source: ICIS news]

The spot prices of isocyanates, including those of PMDI and TDI, have fallen in line with the weak China and European markets.(recasts lead and paragraph 2)

By Ong Sheau Ling

SINGAPORE (ICIS)--The spot prices of isocyanates in the Middle East and Africa, which include the prices of polymeric methyl di-p-phenylene isocyanate (PMDI) and toluene di-isocyanate (TDI), have fallen this week in line with the weaker China and European markets, industry sources said on Thursday.

The prices are expected to decline further in the Middle East in the next few weeks, but those in the African market are expected to stabilise because of upcoming seasonal downstream demand, the sources added.

The spot prices of PMDI and TDI in the Gulf Cooperation Council (GCC) region are lower by $50-60/tonne (€37-44/tonne) or 2.4-2.5% to an average of $1,990/tonne CFR (cost & freight) and $2,390/tonne respectively, after being stable for the past three weeks, according to ICIS data.

Poor market fundamentals in the leading Chinese and European markets have led producers from these regions to seek outlets in the Middle East and Africa to relieve their high inventory levels, regional players said.

In addition, Middle East and Africa-based downstream system house manufacturers and foamers requested lower prices as they were aware of the weak overseas markets, producers said.

A global major based in Germany reduced its offer of PMDI for delivery in October, by $50/tonne from its September settlement price at $1,900-1,950/tonne CFR GCC, which is on par with the offers from a Chinese major and a European producer.

Offers of PMDI to the East Mediterranean (East Med) region for arrival in October were down by up to $50/tonne to $2,000-2,150/tonne CFR.

Northeast Asian cargoes were offered at prices at the low end of this range, while European material was offered at prices at the high end.

A European producer lowered its offer of PMDI cargoes for October cargoes by $150/tonne to $2,350/tonne CFR East Med, but the price was higher than the mainstream offers heard in the market.

Offers of PMDI for delivery to South Africa in October were heard at $2,000-2,050/tonne CFR.

A separate global major adjusted its offer of TDI for October directly to foamers by more than $50/tonne to $2,350/tonne CFR GCC/Nigeria.

A South Korean producer offered its TDI for arrival in October at $2,400/tonne CFR GCC/East Africa.

Suppliers of Japanese and South Korean TDI were unwilling to offer at below $2,400/tonne CFR Middle East/Africa because of their eroded margins, despite prevailing buying ideas at $2,350/tonne CFR Middle East/Africa.

Offers of TDI for ex-Europe cargoes were at $2,450/tonne CFR East Med, but foamers were unwilling to purchase amid the volatile prices.

Despite the decline in isocyanates prices in the Middle East and Africa during the week, the market saw more enquiries being made as demand from the two regions is gradually improving, regional players said.

Looking forward, market players said they are unsure of the price direction in the near future because of the declining isocyanates prices, which were stable in the past few weeks, and the eurozone debt crisis.

The political turmoil in Syria and Libya continues to dampen consumer purchasing power for end-products of TDI, such as furniture and bedding. As a result, the market outlook remains poor in the Middle East.

However, the prices in the African market are expected to be sustained by the seasonal demand from the downstream foam manufacture and construction sectors, where production is expected to pick up at the end of September, according to the market players.

($1 = €0.73)

For more on PMDI and TDI, visit ICIS chemical intelligence
Please visit the complete ICIS plants and projects database
For more pricing intelligence, visit ICIS pricing 
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Ong Sheau Ling
+65 6780 4359

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