Europe TDI June contract prices drop on weak market

12 June 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European toluene di-isocyanate (TDI) contract prices have seen sizeable drops in June, driven by weak market conditions, industry sources said on Wednesday.

“TDI is a commodity and it reacts first to supply and demand changes compared to other [poyurethane] products,” said a supplier.

TDI contract drops in June have been larger than first thought because of strong competition amid reduced domestic and export demand, as well as lengthy supply.

Initial market feedback suggested that price decreases of €30-60/tonne ($40-80/onne) were likely, but further feedback has shown that larger price drops of up to €100/tonne have been implemented in some cases.

In terms of absolute numbers, prices were largely confirmed at €2,050-2,120/tonne FD (free delivered) NWE (northwest Europe) (gross).

There was, however, some discrepancy with the delta moves and absolute numbers quoted, with price decreases of €50-100/tonne mainly mentioned for June and the overriding reference point remains the absolute numbers provided.

Some sources said that they had not seen any price increases larger than €40-60/tonne, but this was typically for players that already had a competitive level or for some suppliers with less pressure to sell.

There were numbers of up to €2,150/tonne FD but these were not widely confirmed.

TDI consumption into the main downstream bedding and furniture sectors is lower than expected. Demand normally seasonally slows at this time of the year, but the downturn is thought to be more driven by economic constraints rather than seasonality.

The European TDI market is long because of slow demand in Europe and limited export opportunities to the Middle East and Africa.

($1 = €0.75)

By: Heidi Finch
+44 20 8652 3214

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