South American TDI buyers look to Asia for supply

23 August 2012 20:38  [Source: ICIS news]

HOUSTON (ICIS)--South American buyers of toluene di-isocyanate (TDI) are looking more to suppliers in Asia while the close relationship with US sources of polyurethane products is reassessed, sources said on Thursday.

Polyurethane foam makers have been buying more product from Asia in the second quarter of 2012 and less from the US.

The change was driven in part by Dow Chemical’s plant in Camacari, Brazil, closing permanently in the latter part of 2011.

The supply shortage was aggravated by the one-month maintenance turnaround at the BASF complex in Geismar, Louisiana, in early 2012, sources said.

The permanent closure of Dow’s TDI production facility in Freeport, Texas, in 2010 has additionally contributed to the recent short availability in Latin America, sources said.

Participants in South America said Asian suppliers of TDI and other polyurethane products, such as polyether polyols, have taken a more aggressive stance in the region and have been offering material very competitively for several months on support from oversupply and moderate demand in Asia.

Market participants said that Asian sellers are quoting not only into the Pacific coast of South America, but are also strongly marketing TDI into Brazil.

Although TDI supply has normalised with product from non-traditional sources, buyers in South America noted caution because, in the past, Asian sellers into Latin America were not considered reliable long-term suppliers and would exit the region when deemed expedient.

In South America, Asian TDI suppliers are quoting aggressively, with offers at $2,800-2,900/tonne (€2,240-2,320/tonne) CFR (cost and freight) South America, down from quotes at $3,000-3,100/tonne CFR South America heard in recent weeks, according to market sources.

US TDI suppliers are Bayer MaterialScience, BASF and Dow Chemical.

($1 = €0.80)

By: Ron Coifman
+1 713 525 2653

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