Europe September polyol prices largely rise on feedstock pressure

12 September 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European polyol monthly contract prices have largely moved up in September because of intensified upstream raw material cost pressure, market players said on Wednesday.

For slabstock conventional flexible polyols, prices have increased on average by €70-80/tonne ($90-103/tonne). in September To reflect this, the range has been changed to €1,790-1,910/tonne FD (free delivered) NWE (northwest Europe).

For flexible polyols, lower increases of €50/tonne and larger hikes of €100/tonne were also heard in September, but they were not widely confirmed. Numbers on either side of the range were also reported in a few cases, but they were considered exceptions rather than the norm.

Rollovers for flexible polyols were also reported in a few cases in September, but they were seen to be for limited volumes and not representative of the general market trend.

Flexible polyols demand is holding up well, although sellers maintain that there has been a seasonal pick-up from the downstream bedding and furniture sectors, which buyers said they have not seen any real evidence of, because of the ongoing soft macroeconomic conditions. Supply in northwest Europe is sufficient-to-good, but it is on the tighter side in eastern Europe, where demand is faring better than in northwest Europe and because of an outage period for one supplier in the region.

For rigid polyols, September price settlements were mixed largely between rollovers and some increases, depending on contract type and source. For monthly business, increases of €50-100/tonne were reported based on higher upstream costs and some output limitations. For quarterly accounts, rigid polyol prices rolled over into September, but with sellers targeting hikes of €100/tonne based on firmer cost pressure. To reflect the mix of contract types and the stable-to-firmer sentiment, the range has been changed to €2,010-2,120/tonne FD NWE.

Rigid polyol demand from the downstream construction sector is reasonable, although buyers suggest that it is not as healthy as expected at this time of year, because of economic uncertainty. Rigid polyols supply is snug – because of output constraints for two suppliers- in an already structurally limited supply base.

In production news, Oltchim’s polyols production at its site in Romania is thought to be offline, although there was no update available. Previous reports suggested that the production site went down at the end of August for maintenance and it was expected to restart in the second half of September.

Staggered maintenance is due to take place at Dow Chemical’s rigid polyol operations at Terneuzen in the Netherlands. This maintenance is due to last for one week per month, starting from September and lasting until November.

($1 = €0.78)

By: Heidi Finch
+44 20 8652 3214

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