Europe Sept TDI contracts mixed between rollovers, some rises

21 September 2012 11:05  [Source: ICB]

European September toluene di-isocyanate (TDI) contract prices have been agreed between roll-overs and selective increases of €25-50/tonne on balanced-to-snug supply and some upward feed cost pressure, market players say.

Despite the stable-to-firmer sentiment, most players confirm that the price range of €2,180-2,270/tonne ($2,795-2,910/tonne) FD (free delivered) WE (western Europe) is still valid for September, with any increases largely incorporated within the existing range.

Numbers either side of this range were also heard, but they were not widely confirmed. There was some talk that price increases are more achievable in eastern Europe and with numbers exceeding the price range in western Europe in some cases. This was attributed to demand faring better in eastern Europe and on the back of some recent output constraints in this region.

One supplier said it had secured larger hikes of up to €100/tonne, quoting higher prices of €2,350-2,370/tonne FD. However, there was insufficient market confirmation to substantiate this as a general level in northwest Europe.

In fact, the same source acknowledged that it was more focused on TDI business in eastern Europe and for export to the Middle East and Africa, where prices were more attractive than in western Europe.

News of the significant hike in the toluene contract price in September came too late to have any real effect on TDI price settlements in September.

Sellers are already gearing up for price increases in October, with initial targets of plus €50-150/tonne. Buyers are aware that the increased feedstock cost pressure could push up TDI prices in October, but said it is too early to see if this will happen, depending on how demand and supply will pan out.


Views on demand are quite mixed, depending on source. Sellers said that demand is healthy and even better than expected in some cases, in view of the soft macroeconomic conditions.

These sellers attribute the good demand to the seasonal uptick from the downstream bedding and furniture sectors and the growth potential in eastern Europe, as well as the Middle East and Africa.

Buyers, by contrast, consider demand reasonable-to-disappointing for this time of year, which they attribute to economic limitations, limiting consumer spending.

The market is described as balanced to tight, depending on region. Eastern Europe and the export markets of the Middle East and Africa are seen to be on the snug side, on robust-to-increasing demand and some recent output limitations in eastern Europe and less import volumes ex-Asia in the Middle East and Africa.

By: Heidi Finch
+44 20 8652 3214

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