24 January 2012 02:22 [Source: ICIS news]
HOUSTON (ICIS)--Prices increase initiatives for polyether polyols, methyl di-p-phenylene isocyanate (MDI) and toluene di-isocyanate (TDI) are being driven by increasing costs and thin margins, market participants said on Monday.
As a result of thinned year-end inventories and the anticipated price increases, better-than-expected demand for polyurethane (PU) products is evident in January, supporting the firming trend, according to industry sources.
Demand from the automotive sector is strong. Demand from bedding and furniture is softer, but expected to recover on seasonality.
Buyers and sellers continue discussions, as most sources said date-slippage was probable and depended on contract terms.
Price increases of 5 cents/lb ($110/tonne, €86/tonne) for polyether polyols were proposed for 1 January, but participants said partial-to-full implementation could start in February at the earliest, or as contracts allow.
A 10 cent/lb price increase for US TDI was proposed for between 15 January and 15 February, depending on supplier. Sources expected implementation of the increases to occur toward the later dates proposed.
US MDI producers have announced 10 cent/lb increases for dates ranging from 1 January to 15 February, depending on supplier. Sources said an MDI manufacturer proposed two increases on MDI, one at 5 cents/lb for 15 January and an additional hike at 10 cents/lb for 15 February.
Industry participants said the initiatives will be at least partially successful, because of a firm producer stance amid the pressure of high feedstock costs biting into thin margins. Sources said the MDI price increase initiatives were the most likely to fully succeed, because of rising feedstock benzene prices.
Major PU products producers are Bayer, BASF, Dow Chemical and Huntsman.
($1 = €0.78)
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