Price and market trends: Europe TDI contracts settle higher

27 September 2013 15:55  [Source: ICB]

European toluene di-isocyanate (TDI) contract prices in September have mostly increased on the back of output constraints for one main supplier and a firm producer stance on a need for margin recovery, although in a few cases rollovers were reported, market sources said on 18 September.

Price increases of €40-50/tonne were mainly mentioned, although in terms of absolute numbers, values according to ICIS were largely quoted between €2,050-2,100/tonne ($2,733-2,800/tonne) FD (free delivered) WE (western Europe), which represents a rise of €30-50/tonne from the published range in August.


Larger price hikes of €60-70/tonne and rollovers were also reported on limited occasions, but it was not seen to reflect the general market trend in September. Prices below this level were also heard in a few cases, but these were not widely confirmed.

Sellers and some buyers said the market has tightened because of output problems for one main manufacturer and unconfirmed reports of output hiccups from a few other selling sources.

Other buyers, however, said they had not seen any market tightness, stating they had not seen any supply constraints amid what they consider to be modest downstream demand.

Views on demand continue to be mixed, depending on source, sector and region. Sellers maintain that activity is good, although one supplier said it is difficult to point to what extent this is supply related or linked to underlying demand. Buying sources, however, consider demand to be fairly flat with little to no evidence of any seasonal improvement in the downstream bedding and furniture sectors.

Activity in the bedding and furniture sectors generally picks up in the autumn ahead of the next season, but some suggest any uptick has been dampened by ongoing reduced consumer confidence and spending.

Some buyers pinpoint demand from the downstream automotive sector as suffering most in southern Europe amid more pronounced economic constraints. Looking towards October, a few producers are already targeting hikes of €120/tonne and €200/tonne respectively, citing low profitability amid higher upstream pressures and the need to address this.

They also maintain that good demand and reduced availability in the market would also support an upward price movement.

Buying sources, however, remain sceptical about whether price increases may be possible in October, considering that any market tightness will be temporary and demand not good enough to support any higher prices, unless availability were to remain reduced.

By: Heidi Finch
+44 20 8652 3214

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