Europe June TDI, flex polyols contracts likely to see price fall

04 June 2013 21:15  [Source: ICIS news]

LONDON (ICIS)--European toluene di-isocyanate (TDI) and flexible polyols contract prices are likely to settle lower in June irrespective of feedstock developments because of soft market conditions, market players said on Tuesday.

Initial TDI contract settlements for June so far show price reductions of €30-60/tonne (€39-79/tonne) because of subdued downstream demand from the bedding and furniture sectors and lengthy TDI supply.

One producer said prices had dropped in June because of economically and seasonally reduced demand, but considered average price decreases for TDI of €30-40/tonne to be more realistic.

News of the slight relief in the upstream toluene contract price for June, however, came too late and is too limited to have any real effect on TDI contract settlements for June, sources said.

The general feeling among market players is that the bearish sentiment in the TDI market is the overriding factor determining lower prices for June. This view is also being echoed in the European flexible polyol market.

European flexible polyol settlements for June are so far showing price reductions of €20-40/tonne. This is because strong competition, resulting from muted demand, and plentiful supply is overshadowing the €15/tonne increase in the upstream propylene contract price for June.

One polyols producer, however, said it had secured some rollovers and price decreases of €10-15/tonne for flexible polyols in June. However, so far, price rollovers were not widely confirmed in the market.

For rigid polyols, price indications for June are stable to slightly softer, as downstream demand is holding up better in the construction and appliances sector and material is structurally less available than for standard flexible polyols. One smaller sized polyols supplier, by contrast, said there were similar level price drops for rigid polyols than for standard grades. However, this view has not been confirmed by others.

European TDI contract prices in May were at €2,150-2,200/tonne FD (free delivered) and European polyols prices in May were at €1,720-1,810/tonne FD for slabstock conventional flexible grades and €1,980-2,050/tonne FD for sucrose based rigid grades, according to ICIS.

($1 = €0.76)


By: Heidi Finch
+44 20 8652 3214



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