Rollover, slight rise in polyols prices expected after feedstock drop

02 October 2013 16:31  [Source: ICIS news]

LONDON (ICIS)--Prices in the European flexible polyols market are expected to stay unchanged or rise by smaller margins than previously projected due to the €40/tonne propylene feedstock drop last week, sources said on Wednesday.

A major producer said it had achieved an increase of €50-60/tonne ($68-81/tonne) in September and had hoped to push for a further rise in October.

“Because propylene came down, [further] polyols [price] increases are not possible,” the producer said.

“Some [other] sellers pushed for lower increases in September [and] they are now increasing [their prices again] in October.”

Other producers who had implemented lower price increases last month managed to increase their prices between €30-40/tonne in October.

Despite the feedstock decrease, producers said there was still a need to recover poor production margins and the October price increases were boosted by increased demand from the bedding and furniture sector.

“The [price] increases were remarkable easy to get,” a second producer said. “Demand must be good, we did get some information that [other producers] were not able to supply as much as is needed. The market is not awash with product and the material is not long.”

A buyer said it had to accept a price increase of €30/tonne despite the propylene reduction, making it a combined increase of €70-80/tonne, bringing its purchase prices up to €1,750-1780/tonne. A second buyer said it saw an October increase of €50/tonne to €1,700/tonne.

“Sellers have been firm on pushing [the] increases,” a third buyer said.

The current ICIS range remains representative of September business and is currently quoted at €1,700-1,770/tonne FD (free delivered) NWE (northwest Europe).

Propylene prices went up by €110/tonne between August and September to €1,150/tonne before coming down to €1,110/tonne in October.

($1 = €0.74)

By: Stefan Naidu
+44 208 652 3214

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