Europe TDI contract prices largely stable in February

06 February 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European toluene di-isocyanate (TDI) contract prices have largely rolled over into February, albeit with selective increases of €30/tonne ($41/tonne), as high costs were offset by modest demand and good availability, market players said on Wednesday.

Producers tried to increase prices by €100-200/tonne effective 1 February - to be achieved by the end of the first quarter - citing high upstream toluene and energy costs and the need for margin recovery.

However, sellers’ increase attempts in February were met by strong buyer resistance amid lacklustre demand and good supply.

Both buyers and sellers confirmed stable prices as the general trend in February and the range remained steady at €2,200-2,260/tonne FD (free delivered) western Europe, according to ICIS. Price increases of €30/tonne were reported by a few sellers across their portfolio, but this was not seen to be representative in northwest Europe.

By contrast, one buyer said it had secured a price reduction of €30/tonne for TDI in February, but this was not confirmed by other players.

News of the reduction in the European toluene contract price in February came too late to have any impact on TDI price discussions in February. Players also said the reduction in feedstock costs was not enough to make any real difference – particularly as the magnitude of the decrease in February was seen to have a largely cancelling-out effect following a similar level increase in toluene contract costs in January.

The European TDI market is largely described as balanced to long in northwest Europe. TDI demand in the main downstream bedding and furniture sectors is steady – albeit at a modest level when compared with the pre-crisis period.

Sellers and buyers said they were generally satisfied with initial demand indications for February even though it was a shorter working month. However, some sources said the soft economic conditions continued to limit consumer confidence and spending in the end-user markets – particularly in some parts of Europe which have been most hit by fragile economic conditions.

($1 = €0.74)

By: Heidi Finch
+44 20 8652 3214

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