11 April 2014 13:51 [Source: ICIS news]
SINGAPORE (ICIS)--Spot flexible foam polyether polyols prices in the Middle East, including the Gulf Cooperation Council (GCC) area, fell for the second consecutive week to $2,350-2,400/tonne CFR (cost and freight) GCC/Middle East, with prices softening at the high end of the range by $20/tonne, according to ICIS data on Friday.
Sellers said they largely decreased their offers because of further declines in feedstock propylene oxide (PO) prices in parts of Asia and inventory pressure.
In addition, they wanted to entice interest from buying, which were said to be delaying their purchases.
Import prices in China fell again, this time by $30/tonne at the low end to $1,870-2,030/tonne CFR China during the week ending 4 April.
Spot import PO market participants in China were reported mostly adopting a wait-and-see approach.
In addition to softening PO prices, a China based producer said sellers were storing thousands of tonnes of flexible polyols at high cost.
While the information could not be verified with other sellers, there was a unanimous agreement that prices were on the downtrend for the coming weeks.
Buyers were said to be expecting further price declines and were largely refraining from bidding.
A GCC based trader said it heard offers in the market at $2,400/tonne CFR GCC from South Korea-based producers. The trader added workable buying ideas were at $2,350-2,380/tonne CFR GCC for April shipment.
A northeast Asian trader said it was offering parcels at $2,380-2,400/tonne CFR GCC for April shipment, but had not received any buying ideas yet.
A South Korean producer said it decreased its offer to $2,420-2,430/tonne CFR GCC/Middle East for April shipment, but had not received any bids.
A seller of European origin material said, if 10% solid-content polymer polyols (which are usually $50 higher) had reached levels of 2,400/tonne CFR Middle East in the East Med region for April shipment, then conventional polyols will be sold at $2,350/tonne CFR Middle East.
A Japanese trader said it cancelled its negotiations because its customers had not shown any interest in its offer at $2,400/tonne CFR GCC for April shipment.
Looking forward, some sellers said the decline was only temporary, and prices would pick up again once the spate of plant shutdowns starts in Asia.
Three PO plants with a combined capacity of 479,000 tonnes/year were last reported scheduled to shut down for maintenance between April and July.
A fourth plant located in China with capacity of 285,000 tonnes/year was also heard to be on schedule to shut down for maintenance for around 60 days starting from the first half of May.
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