Europe TDI contracts largely steady in November, despite some rises

13 November 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European toluene di-isocyanate (TDI) contract prices have largely rolled over into November, despite some increases, as recent and current production constraints for a few sellers are being weighed against reasonable-to-modest demand, said market players on Wednesday.

European TDI contract prices in November were assessed steady at €2,100-2,150/tonne ($2,838-2,905/tonne) FD (free delivered) WE (western Europe), according to ICIS.

The drop in the upstream toluene contract price in November had come too late to have any impact on TDI contract settlements in November, according to players, who added that TDI prices are largely driven by market factors rather than feedstocks.

One manufacturer noted that despite the relief in the upstream toluene contract price, raw material costs remain high relative to TDI prices, stating sellers had not managed to pass on the previous feedstock increases into the TDI market.

Some sellers said they had mainly kept prices stable in November and while they had implemented price increases of €20-50/tonne, they acknowledged they were selective and largely incorporated within the existing range from October.

Buying sources largely confirmed price rollovers in November, stating that although there was some tension in supply because of a few unplanned issues, it was manageable amid flat-to-modest demand.

A few customers said they had managed to conclude the majority of their business with rollovers, with limited price increases. One of the buyers said it had accepted a modest increase for its low-end business, which was already below the range because it was not seen to reflect the general market level.

Another customer said it had agreed to rollovers from most of its suppliers and an increase of €30/tonne from one seller, quoting its November prices within the existing range from October, albeit closer to the upper end.  

Numbers below the range were heard from a few players, but they were not widely confirmed. By contrast, one manufacturer said it had passed on average increases of €40/tonne, quoting its price range at €2,120-2,180/tonne FD. However, there was no other market confirmation to substantiate prices above the range.

Views on consumption in the main downstream bedding and furniture sectors are mixed, depending on source. Sellers and one buyer said that demand in November is reasonable to good for the time of year, with a few suppliers saying that they had received some additional enquiries, which they attribute to restricted output of others.

Several customers, however, describe demand as subdued amid ongoing economic constraints, which continue to limit consumer confidence and spending.

The TDI market is described as tight, according to a number of sellers, who attribute this mainly to a spate of output constraints, which have been largely unplanned over the last few months.

A few of the sellers also suggest that demand remains good both domestically and for exports, which is also contributing to the market tightness. Buying sources, however, maintain that supply is sufficient, stating that any disruption from a few sellers is being sufficiently covered by others, particularly as demand remains muted.

BASF’s TDI plant in Schwarzheide,Germany, is in an unplanned shutdown in mid-November, although further details were not disclosed at the time of writing.

In other recent manufacturing news, output has been normalised at BorsodChem’s TDI T2 facility in Kazincbarcika, Hungary, and the force majeure on TDI supplies from the site has been lifted.

($1 = €0.74)

By: Heidi Finch
+44 20 8652 3214

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