EU Aug polyols assessed stable to lower on weaker demand

08 August 2012 23:00  [Source: ICIS news]

LONDON (ICIS)--European polyol contract prices have been agreed stable to lower in August, depending on grade and seller, because of lower demand and plentiful supply, market players said on Wednesday.

Some producers said they had accepted rollovers for polyols in August and refused to accept any price reductions, in view of the intensified cost pressure.

Some other buying and selling sources, however, acknowledged that there was a mix of rollovers and some selective decreases for flexible poyols from certain suppliers in August. The latter was thought to be due to the need to shift some volumes during the quiet summer holiday period, along with generally good polyols output.

Flexible polyol prices in August were largely confirmed within the range €1,720-1,830/tonne ($2,123-2,259/tonne) FD (free delivered) NWE (northwest Europe). This represents a rollover for the low end and a reduction of €20/tonne at the upper end of the range.

Numbers on either side of the range were also heard, but they were not widely confirmed.

For rigid polyols, prices had largely rolled over, despite the higher costs, on fairly balanced market conditions. In addition, a number of rigid polyol accounts have been agreed on a quarterly basis, which means that prices have rolled over into August.

One producer had said that there was more chance of some minor increases for rigid rather than flexible polyols in August, because rigid demand was faring seasonally better than for flexible polyols. However, there was no market confirmation to substantiate any upward price move for rigid polyols in August.

Looking ahead, producers said there is an urgent need to increase polyols prices with effect from September, depending on contract type, based on the higher production costs. 

Sellers were also hopeful that demand would seasonally pick up in the downstream bedding and furniture sectors, which could also help support a possible upward price move.

Buyers, however, said they would resist any possible price rises in September, stating that demand remained fragile because of the economic uncertainty and because it remains to be seen whether an improvement in demand would materialise.

A few buyers, however, conceded that some price increases could be likely for polyols in September, particularly if upstream propylene costs continue to rise significantly.

($1 = €0.81)


By: Heidi Finch
+44 20 8652 3214



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