Europe October polyol prices fall on demand, feedstocks

12 October 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European  polyol contract prices fell in October because of stable-to-lower demand and pressure from cheaper propylene feedstock, market players said on Wednesday.

Standard flexible polyol prices were mainly confirmed down by €40–50/tonne ($55–68/tonne) in October, taking values to €1,740–1,800/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.

Numbers above and below the range were also heard in a few cases, but they were not widely confirmed in the market.  

Rollovers for standard flexible polyols were also heard in October in a limited number of cases, but they were not seen to reflect the general market trend.

Demand is holding up reasonably well, although some slight softening is noted because of some general macroeconomic concerns.

Sources expected to see a larger price reduction for propylene in October, which had exerted some additional pressure on polyol prices.

Players said the recent supply constraints for at least a few producers had no impact on pricing in October, as most settlements were already agreed prior to these supply problems. 

In addition, the market remains largely balanced, despite any supply difficulties, because of some signs of weaker demand.

For sucrose-based rigid polyols, prices settlements for October and the fourth quarter are mixed between rollovers and decreases of €30–40/tonne. This is because lower-than-expected demand from the downstream construction sector is being weighed against a limited supply base.

Although few players are prepared to disclose actual numbers, there are some indications that prices are largely in the €1,900s/tonne FD NWE. The price range has been edged down by €30/tonne in October, taking values to €1,920–1,970/tonne FD NWE.

In production news, some market players suggested that Bayer had experienced some polyol supply difficulties at its Fos-sur-Mer site in France because of recent strikes in the region, linked to its upstream third-party supplier.

Bayer was not immediately available for comment.

The restart of Repsol’s upstream propylene oxide/styrene monomer (PO/SM) operations at Tarragona, Spain has been delayed, following maintenance work. As a result,  availability for PO, SM and derivatives such as polyols and monopropylene glycol (MPG) have been affected.

Contracts, though, are being covered, a company source said earlier. An update from the company said PO/SM operations are likely to be resumed by Friday.

Market sources said routine maintenance at Shell Chemical’s PO and polyols operations in the Netherlands is ongoing. It is thought to have started in September and should last until the end of October. However, the company has declined to comment on this, in line with policy.

($1 = €0.73)


By: Heidi Finch
+44 20 8652 3214



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