Europe TDI mostly rolls over in June on improved supply

06 June 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European toluene di-isocyanate (TDI) contract prices have mostly rolled over into June on improved supply, market players said on Wednesday.

This general price stability marks the end of five successive months of price increases, driven by market tightness.

TDI prices increased by €470-520/tonne between December 2011 and May 2012, according to ICIS.

In June, a few sellers said that had secured increases of €20/tonne in select cases, particularly at the low end of the range. However, there was insufficient market confirmation to substantiate this as a general trend.

Prices were mainly agreed at €2,1,80-2,200/tonne ($2,725-2,750/tonne) FD (free delivered) NWE (northwest Europe) as a minimum in June, with numbers confirmed up to €2,300/tonne FD for average-to-small volume accounts.

Downward price adjustments for TDI in June were heard in a few cases, with numbers reported as low as €2,100/tonne FD, but these were seen to be exceptions rather than the norm. Players said that the price relief in upstream toluene costs in June had no effect on TDI prices, as the change in feedstocks was not substantial enough.

The European TDI market has moved more balanced into June, following some signs of seasonally slowing demand and weaker export opportunities.

This is in contrast to the tight supply seen over the last few months, driven by a spate of production constraints, both planned and unplanned, as well as strong export activity.

Views on TDI consumption in the downstream bedding and furniture sectors are mixed, depending on source and region. Some players said they had seen seasonally lower demand in June when compared with May, albeit generally in line with expectations for the time of year.

There is, however, talk of macroeconomic woes also limiting demand, particularly in the Netherlands and southern Europe.

By contrast, a few players said that demand continues to hold up well, particularly in central and eastern Europe, with little to no evidence of any seasonal or economic-related slowdown yet.   

In production news, BASF’s TDI facility at Schwarzheide in Germany is experiencing some minor production hiccups, although they are expected to be resolved soon. The TDI facility had undergone a maintenance turnaround in April/May.

Ciech subsidiary Zachem’s TDI facility at Bydgoszcz in Poland is due to enter into a turnaround in the second half of June and last for around two and a half weeks.

BorsodChem is preparing for its annual maintenance turnaround at its isocyanate and utility operations at Kazincbarcika in Hungary, which is due to start in the second half of July and last for around three to four weeks. The turnaround at the site is likely to commence on 21-22 July, slightly earlier than originally planned. 

($1 = €0.80)

By: Heidi Finch
+44 20 8652 3214

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