Price and market trends: Europe MDI contract prices steady

26 October 2012 08:43  [Source: ICB]

European methyl di-p-phenylene isocyanate (MDI) contract prices have been agreed largely steady in October and the fourth quarter, with some increases of €20-50/tonne ($26-65/tonne), as relatively high feedstock costs are weighed against reasonable-to-low demand, market players said.

Producers had tried to increase MDI prices across the board in October and the fourth quarter because of high upstream cost pressure and margin recovery, but this has proved difficult in a number of cases amid strong buyer resistance.


Players generally acknowledge that price stability is the main trend in October and the fourth quarter and any price increases are largely incorporated within the existing ranges from September.

EU MDIAs a result, MDI contract prices remain steady for October and the fourth quarter at €2,030-2,150/tonne FD (free delivered) NWE (northwest Europe) for crude MDI and €2,130-2,200/tonne FD NWE for pure MDI.

A few sellers said that crude MDI prices had increased in October and the fourth quarter, particularly for low-end business, taking values to around €2,060/tonne FD NWE, but there was insufficient market confirmation to substantiate this as a general trend.

By contrast, numbers below the ranges were also heard in a few cases, but they were seen to be for net rather than gross values and therefore not representative of the general market level.

MDI consumption is varied, depending on source and sector. Demand into the downstream construction sector is reasonable but is being dampened to some extent by economic limitations. MDI offtake in the automotive sector is slow because of the poor macroeconomic conditions. MDI into appliances and coatings and adhesives, however, remains fairly flat.

The MDI market is largely balanced, with recent and ongoing production constraints being offset by lower demand.

In production news, BASF's MDI plant in Antwerp, Belgium, is still down for maintenance, with a restart expected in the second half of October. The unit went down in early September. Sources have said the turnaround may also include some capacity expansion, but the company declined to comment.

Dow Chemical's MDI facility in Stade, Germany, remains at reduced operating rates because of ongoing feedstock constraints. The unit has experienced some output restrictions over recent weeks for this reason. The company's other MDI unit in Estarreja, Portugal, is now running at normal rates, following some technical problems and maintenance which has taken place over the last month.

By: Heidi Finch
+44 20 8652 3214

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