EU polyols producers targeting May increases to recover margins

23 April 2014 16:31 Source:ICIS News

LONDON (ICIS)--European flexible polyols producers are targeting price increases in May to improve their profit margins after the price of feedstock propylene rose in April and polyols prices rolled over, sources said Wednesday.

Propylene producers are pushing for further increases in the feedstock based on tight supply, although negotiations are yet to begin in earnest.

“Our [May flexible polyols increase] target will be plus €50/tonne, as we could not do it in April,” a producer said. “We will add [any potential increase in] propylene on top of the €50/tonne [increase].”

Discussions over polyols pricing in May have also not begun yet and mixed views were expressed on market fundamentals. Demand was seen to be stable to softer while buyers have said availability remains high.

“Not sure what will happen [in May],” a buyer said. “[I have] heard there could be an increase from suppliers but demand is very bad.”

A second buyer said it is expecting a rollover in May but added it has yet to begin negotiations.

Market players are keenly awaiting the May propylene settlement which is expected to be confirmed next week.

The April price range for flexible polyols is €1,760-1,830/tonne free delivered (FD) northwest Europe (NWE).

By Stefan Naidu