21 September 2012 11:05 [Source: ICB]
European polyol monthly contract prices have largely moved up in September because of intensified upstream raw material cost pressure, market players say.
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, but they were seen to be for limited volumes and not representative of the general market trend.
Flexible polyols demand is holding up well. Sellers maintain there has been a seasonal pick-up from the downstream bedding and furniture sectors, of which buyers said they have not seen any real evidence, because of the ongoing soft macroeconomic conditions.
Supply in northwest Europe is sufficient-to-good, but is tighter in eastern Europe because of stronger demand and an outage period for one supplier in the region.
For rigid polyols, September price settlements were mixed largely between rollovers and some increases. 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, but with sellers targeting hikes of €100/tonne based on firmer cost pressure. To reflect the mix of contract types and 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, but not as healthy as expected, buyers say, because of economic uncertainty. Rigid polyols supply is snug because of output constraints in an already structurally limited supply base.
Oltchim's polyols production in Romania is thought to be offline, although no update was available. Previous reports suggested the site went down at the end of August for maintenance and would restart in the second half of September.
Maintenance of one week per month from September to November is due to take place at Dow Chemical's rigid polyol operations at Terneuzen, the Netherlands.
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