08 February 2012 07:13 [Source: ICIS news]
By Ong Sheau Ling
Market players estimated the TDI demand in
Theoratically, demand should improve in line with the expected GDP growth at the high single digits, but the recent fuel price increase, internal civil conflict and a shift of preference to spring-based mattresses may keep the potential increase in demand relatively small, they added.
“Being a developing country,
“Based on the GDP growth, downstream demand from the key foam sector should increase at the same rate, or even higher,” said a European trader who actively sells to
“Although the GDP paints a better picture, in reality, consumers have less purchasing power because of the fuel price increase,” said another Nigerian TDI distributor.
Fuel prices have increased by about 50% in
“Because of these strikes, the export route (of finished foam products) to neighbouring countries has been blocked, affecting trade,” a Nigerian foamer said.
There was also a shift in the production of flexible foam mattresses to spring-based mattresses, which cost less to make, weakening the demand for TDI, market players said.
TDI and flexible polyether polyols slabstocks are raw materials to manufacture flexible foams, which are used to make mattresses and furniture.
Also, volatile TDI prices have a negative impact on demand, industry players said.
Prices have on average increased by $100-150/tonne (€76-114/tonne) since January to hit $2,550-2,600/tonne CFR (cost & freight)
“The sudden hike in prices forced the foamers to retreat to the sidelines and hesitate to procure fresh cargoes. Some foamers are running at reduced rates because of price uncertainty and bleak demand outlook,” a northeast Asian TDI supplier said.
“Considering all these factors, and subject to the global economy performance, the expected demand in 2012 may not increase or decrease significantly, but rather hover at a narrow range,” another European producer who sells to
($1 = €0.76)
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