US Q1 TDI prices assessed up as producers stand firm on increases

HOUSTON (ICIS)–A 4 cent/lb ($88/tonne) hike for US toluene di-isocyanate (TDI) assessed this week follows the 2 cent/lb increase assessment of last week, totalling a 6 cent/lb boost for the quarter, driven by a firm producer stance on price increase initiatives.

TDI price increases had previously been heard settling at 6-8 cents/lb for the first quarter on 10 cent/lb initiatives, according to input from industry participants.

TDI buyers noted that feedstock costs did not appear to be the major driver for TDI prices. Industry sources said that the hike was supported by a strong position by producers, by the view that the number of TDI manufacturers in the Americas is limited, and by the challenging logistics for TDI imports from other regions.

Demand for downstream polyurethane (PU) products in March is gauged as softer than expected, according to sources, possibly because of the extended harsh winter weather. Business, however, is expected to improve during the spring and summer.

Sources said that recent special incentives at car dealers could be a sign of high inventories and weak demand for automobiles, which in turn could dampen PU business in the near future. On the other hand, soft conditions could be short-lived, as business could rally on warming weather after the recent heavy snowfalls.

TDI prices before the increases are assessed at $1.58-1.73/lb DEL (delivered) in bulk.

US TDI suppliers are Bayer MaterialScience, BASF and Dow Chemical.