Price and market trends: Europe Feb polyol prices roll over despite higher upsteam costs

15 February 2013 09:42  [Source: ICB]

European polyol contract prices have largely rolled over into February, despite higher upstream propylene costs in February, because of a well-supplied market amid modest downstream demand, said market players on 6 February.

Prices are steady at €1,770-1,870/tonne ($2,391-2,527/tonne) FD (free delivered) NWE (northwest Europe) for slabstock conventional flexible grades, , according to ICIS, and €2,010-2,080/tonne FD NWE for sucrose base rigid grades.

EU polyolsSellers stressed the underlying need to increase polyol prices and achieve reinvestment economics, following several months of high upstream propylene costs. However, buyers maintained that there was no room to increase prices amid lacklustre downtream demand and good supply.

Buying and selling sources agreed the €10/tonne rise in the propylene February contract price was not enough to affect polyol prices, particularly given January's modest fall in upstream costs.

Sources confirmed a rollover as the general price trend for flexible and rigid grades in February. One seller said it had secured mainly rollovers, but also accepted minor increases for some low-end business for flexible polyols - although the latter was seen as an exception.

By contrast, there was some talk of price reductions for flexible polyols in February in a few cases amid strong competition from certain sellers in northwest Europe and eastern Europe, but this was not widely confirmed.

Flexible polyol demand in the downstream bedding and furniture sectors remains satisfactory, but could be better in what is traditionally a healthy period. However, players said soft macroeconomic conditions continued to limit consumer confidence and spending in certain end-user sectors.

Rigid polyol consumption in the downstream construction sector remains slow in line with low seasonality and some underlying economic limitations, dampening activity in some parts of Europe.

The polyols market is largely described as balanced to long, as output problems are outweighed by subdued downstream demand.


Oltchim halted polyols production in the week beginning 4 February after feedstock shipments were halted. It has begun insolvency proceedings and workers are protesting about unpaid wages.

Dow Chemical's polyol operations in Terneuzen, the Netherlands, are due to undergo around one month of routine maintenance from mid-March.

There has been unconfirmed market talk that Shell Chemical's Netherlands polyol facility in Pernis will undergo planned maintenance at the end of the first quarter or in the second quarter.

  • Additional reporting by Marian Chiriac in Bucharest

By: Heidi Finch
+44 20 8652 3214

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