07 March 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European polyol contract prices have been driven up in March by intensified cost pressure and the need for margin recovery, market players said on Wednesday.
For flexible polyols, price increases were mainly between €60-80/tonne ($79-105/tonne), taking values to €1,810-1,930/tonne FD (free delivered) NWE (northwest Europe). There was also talk of larger hikes of €80-100/tonne for the month, but they were not widely confirmed.
Monthly rigid polyol prices have moved up to €1,990-2,040/tonne FD in March, reflecting an increase of €50-60/tonne, for the same cost reasons as for its flexible counterpart. Higher and lower numbers were also talked but were not seen to reflect the general market level.
Rollovers were also reported, especially for the quarterly accounts and also in a few monthly cases, although the latter was not widely confirmed. Sellers said they would look to recoup lost margins on longer term accounts in the second quarter.
Buyers reiterated their concern as they are faced with increases for both polyols and its flexible counterpart, toluene di-isocyanate (TDI) and highlighted the difficulty in passing this on downstream to the foam sector.
One buyer said “as margins are being squeezed downstream and have been for the last few months, pricing in March has to be addressed”.
The polyol market is frequently described as balanced to tight as a result of a series of upstream and polyol production issues.
($1 = €0.76)
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