Europe flexible polyol contract prices fall in July, rigids vary

11 July 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European flexible polyol contract prices have fallen across the board in July, while rigid polyols ranged from rollovers to reductions, based on the differing impact of feedstock pressure and a differing supply situation, said market players on Wednesday.

Flexible slabstock conventional polyol prices have dropped by €50-80/tonne ($61-98/tonne), depending on starting point, based on the significant drop in upstream propylene costs and plentiful supply. Flexible polyol contract prices in July were assessed at €1,720-1,850/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.

Numbers below the range were also heard in a few cases, but they were not widely confirmed.

Larger reductions of €90-100/tonne for flexible polyols in July were also reported in a few cases, but they were not seen to reflect the general market trend.
Buyers had tried to push for larger price drops in July, based on the €170/tonne price drop in upstream propylene contract prices, but polyol sellers had resisted. Sellers said they had not fully recovered the propylene price increases from earlier in the year and could not accept a larger drop based on heightened volatility in the upstream markets.

Flexible demand in the downstream bedding and furniture sectors is seasonally slow as a result of the summer plant shutdowns, along with underlying economic uncertainty, which is also limiting buying. The flexible polyols market is well-supplied because of good output and subdued demand.

Sucrose base rigid polyols settlements in July, however, range from rollovers to reductions of €30-80/tonne, although price drops as large as €80/tonne were not widely confirmed.

Players said that rigid polyol prices are less susceptible to propylene feedstock cost pressure because they have less propylene content when compared to its flexible counterpart and the rigid supply base was structurally more limited.

Despite the stable-to-softer sentiment, prices were largely reported in the €2,000’s/tonne FD NWE in July. Numbers below this were also heard from one player, but they were not confirmed by others.

($ 1= €0.82)

By: Heidi Finch
+44 20 8652 3214

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