Middle East polyols prices likely supported amid tight supply

Source: ICIS News


SINGAPORE (ICIS)--Spot import prices of polyols in the Middle East saw a bump higher in the week ended 1 March, and are likely to remain supported in coming weeks amid a lack of available material for buyers in the region.

Prices of all grades of polyether polyols assessed by ICIS in the Middle East were higher in the week mainly due to increased offer levels and higher workable ranges.

For 10-13.5% polymer polyols (POP) drummed cargoes in the Middle East, the workable range for POP import prices in the Middle East was deemed to be $2,000-2,050/tonne CFR Middle East, $50/tonne higher than in the previous week, in line with higher workable levels.

These were the highest levels for POP in the Middle East since ICIS began tracking the data in August 2015.

Workable levels were adjusted up due to the limited volume heard available to Middle Eastern market players and also to factor in the increase in prices of feedstock propylene oxide (PO), the sources said.

This was not expected to change soon although there have been no known disruptions or maintenance shutdowns that could contribute to a sharp reduction in available material, sources added.

“Prices are going up; everyone tells me there is a shortage but I don't know really know why there’s a shortage,” said one market source.

For conventional grade polyols, Middle East import prices were also firmer by $50/tonne in the week, at $1,900-1,970/tonne CFR Middle East, as they tracked the increase in POP prices. These were also the highest levels for rigid polyols in the Middle East since February 2015 but not the highest on record, according to ICIS data.

There have been limited cargoes of conventional polyols available to Middle Eastern buyers over the past several weeks as POP is more commonly used.

Prices of rigid polyols were also up by $50/tonne in the week, at $1,650-1,700/tonne CFR Middle East, the highest since April 2015, in very limited discussions. The move higher in rigid polyols was in line with the increase in POP and conventional polyols, and also tracked a rise in Asian prices.

Feedstock PO prices were also a factor behind the firmer polyols price trend.

In the week ended 23 February, PO spot import prices in China rose on the back of rising domestic prices, amid a lack of offers.

Some Asian polyols producers were unwilling to allocate much volume to Middle Eastern markets as they were able to sell their product at higher prices in their domestic or regional Asian markets.

Most of the polyols supplied to the Middle East are produced in Asia. Saudi Arabia’s Sadara Chemical is the only polyols producer in the region, and it currently only produces conventional grade polyols.

There was however limited information in the week about any Saudi-origin conventional polyols available to buyers in the Middle East.

“The market is a bit confusing with so many different prices. But prices are generally high,” said one Asian source. “I think (prices) will be maintained, or go up.”

Other Asian market sources confirmed that polyols prices were being offered at higher levels compared with Middle East prices, but buying interest was also showing weakness as isocyanates prices were still near record highs.

Isocyanates and polyols are used together in the manufacture of polyurethane (PU) foam products.

Focus article by Izham Ahmad

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