Price and market trends: Europe July crude MDI contract prices largely lower

12 July 2013 09:29  [Source: ICB]

Lower feedstock benzene exerts downward pressure as do poor market conditions downstream

European crude methyl di-p-phenylene isocyanate (MDI) contract prices are largely lower in July and the third quarter, despite some rollovers, market players said on 3 July.

Modest demand and good supply has resulted in a bearish sentiment for a number of crude MDI contracts in July and the third quarter. News of the drop in the upstream benzene contract price in July was also a contributory factor, according to some players, although others considered that the downward pressure was more market-related rather than feedstock-related.

For crude MDI monthly business, price reductions of €20-40/tonne ($26-52/tonne) were mentioned in July by both buying and selling sources.

To reflect this, the range has been €2,020-2,100/tonne FD (free delivered) NWE (northwest Europe), with reductions of €40/tonne represented at the low end and price decreases of €20/tonne at the high end. Crude MDI numbers below this were heard in a few cases, but were on a net basis, so were therefore not representative of general gross price levels.

Some sellers said they had secured price rollovers for crude MDI in July and one seller said this was also the case for bi-monthly accounts valid for July and August to cover the summer holiday period. However, there was no other market confirmation to substantiate price rollovers in northwest Europe.

For quarterly crude MDI contracts, both buying and selling sources confirmed price reductions of €20-50/tonne for the third quarter. Larger price drops of €80-90/tonne were mentioned from one customer, but this was not confirmed by other market players.

By: Heidi Finch
+44 20 8652 3214

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