07 March 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European toluene di-isocyanate (TDI) contract prices have increased in March, driven by mounting pressure from rising toluene costs and the need to recoup lost margins, market players said on Wednesday.
Limited supply was also a significant factor in the upward price move.
The majority of buyers and sellers confirmed that monthly contract prices had risen by an average of €200/tonne ($263/tonne) over and above February levels.
Most March business was reported at around €2,000/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Higher and lower levels were also noted but the final range of €2,000–2,140/tonne was considered by most to be a fair assessment.
TDI remains very tight according to many participants and one producer says: “Volume is more important than pricing; no one talks about prices, only securing material.”
This tightness, together with the need to improve margins following ongoing and recent feedstock hikes, continues to put upward pressure on the TDI market.
A number of sources made it very clear that as of April and also for quarterly contracts, further increases were on the cards.
Some sources say that receiving required volumes of TDI is more important than pricing.
Demand is not widely described as strong although sources continue to note healthier offtake from northern and eastern European markets.
The present tightness is frequently attributed to recent production issues and, because of this, producers have grasped the opportunity to lift numbers in a bid to recover lost margins.
Some expect the tightness to persist for a couple of months to come.
TDI is used in the manufacture of resilient polyurethane (PU) foams for such uses as bedding, upholstery and carpet underlay.
($1 = €0.76)
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