26 October 2012 08:48 [Source: ICB]
European October toluene di-isocyanate (TDI) contract prices have been agreed between rollovers and average increases of €30/tonne ($39/tonne), as intensified cost pressure is weighed against fairly balanced market conditions, market players said.
The upward price tendency was particularly evident in low-end business, while the upper end of the range largely rolled over from September. To reflect this, the range was changed to €2,210-2,270/tonne FD (free delivered) NWE (northwest Europe). This represents a rise of €30/tonne at the low end and a rollover at the upper end of the range.
A few producers said they had secured larger increases of €50-100/tonne across the board in October, but there was insufficient market confirmation to substantiate this.
Numbers either side of the range were also heard in October, but they were not seen to reflect the general market level.
Consumption into the downstream bedding and furniture sectors is mixed, depending on source and region.
Producers said that demand was generally holding up reasonably well, although buying sources said they were dissatisfied with demand and that it was below seasonal expectations for the time of year.
LOW CONSUMER CONFIDENCE
Demand from the downstream mattress and upholstery sectors should be healthy during the autumn, but some players said it has been dampened this year by soft macroeconomic conditions leading to reduced consumer confidence and spending.
Southern Europe has been most affected by the economi constraints, while demand in northwest Europe remains relatively flat.
Eastern Europe is performing best, according to some players, with good export opportunities to the Middle East and Africa because of the growth potential in these emerging markets compared with the more mature northwest European market.
However, a few buyers suggest that demand is also slowing across Europe including eastern Europe, although this is not widely confirmed in the market.
The European TDI market is largely balanced, as any recent and ongoing output constraints are being offset by signs of lower demand at present.
One TDI supplier recently experienced some production constraints linked to feedstock availability, but this was resolved. There was also some market talk that run rates were reduced in some cases, amid poor profitability.
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