Europe Jan polyol contracts mixed between rollovers to reductions

16 January 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European flexible polyol contract prices in January are mixed between rollovers and reductions of €10-20/tonne ($13-27/tonne) on lower propylene feedstock costs and modest market conditions, market players said on Wednesday.

European slabstock conventional flexible polyols were assessed in January at €1,770-1,870/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.  This reflected a rollover for low-end business, but a decrease of €20/tonne at the upper end of the range.

Flexible polyol prices down to €1,750/tonne FD in January were also reported, but they were not widely confirmed.

Sellers had wanted to raise polyol prices in January to improve profitability, but their attempts had been thwarted by the continued downtrend in propylene feedstock costs, good availability and strong competition amid modest demand.

Flexible polyol demand in the downstream bedding and furniture sectors is reasonable, but could be better. There is some restocking activity in January, but it still remains difficult to gauge underlying demand. Consumption from the bedding and furniture sectors is traditionally healthy in the first quarter and early part of the second quarter, but it remains to be seen if this materialises.

Sucrose base rigid polyol prices had largely rolled over into January and the first quarter, as these prices were less sensitive to propylene feedstock fluctuation than for flexible polyols. The structurally limited supply base for rigid polyols means that it holds its prices better than for flexible polyols, which is structurally larger in supply. Larger price reductions of €15/tonne were reported for rigid polyols.

Sucrose rigid polyol prices remain steady in January at €2,010-2,080/tonne FD NWE, according to ICIS. Higher numbers were heard, but this was for the Mediterranean and not reflective of northwest Europe.

Rigid polyol demand in the downstream construction sector remains seasonally low during the winter. Relatively mild weather so far this winter means that building activity has been reasonable, although players are closely monitoring the cold snap, which has taken place in Europe over the last few days and the possible halting effect on building activity, were it to continue for a prolonged period.

Polyols supply was generally seen to be good. One producer said it was balanced-to-short in its own system, as it was preparing for its forthcoming turnaround, which was expected to take place in mid-March for around four to five weeks.

($1 = €0.75)

By: Heidi Finch
+44 20 8652 3214

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