Middle East PMDI prices rebound as demand heats up

Source: ICIS News

2019/02/28

SINGAPORE (ICIS)--Spot import prices of polymeric methylene diphenyl diisocyanate (PMDI) in the Gulf Cooperation Council (GCC) rebounded on the back of upbeat demand and snug supply, a scenario that may well keep prices buoyant in the coming days.

PMDI, when combined with rigid polyols, is used in refrigerators, as well as insulation in the construction sector.(Photo by Gene J Puskar/AP/REX/Shutterstock)

- Increased demand boosts suppliers’ confidence

 - Snug spot supply lifts market sentiment

 - TDI bucks PMDI gains on lacklustre demand

Cargo volumes of northeast Asia-origin PMDI fetched levels close to $1,500/tonne CFR (cost & freight) GCC.

Spot prices in the week ending 28 February averaged at $1,460/tonne CFR GCC, more than $50/tonne higher than the preceding week.

Prices in the Middle East were last seen at this level in early December 2018, according to ICIS data.

A rebound in demand helped to drive up market discussions in the week. An upbeat scenario in northeast Asia provided a further boost to sentiment in the GCC region, according to market participants.

Spot cargoes of northeast Asia-origin PMDI were understood to have fetched levels at slightly below $1,500/tonne CFR GCC.

Offers dissipated in the later part of the week as suppliers contemplated the turn of the market with renewed confidence.

There were producers in northeast Asia looking to raise asking levels for April material on the back of snug inventories, while a string of spot enquiries trickled in.

Sentiment in the short term was optimistic with seasonal demand envisaged to fuel the market, while keeping spot prices afloat at the very least, according to regional sources.

On the flipside, toluene di-isocyanate (TDI) markets in the GCC bucked the upward trend as lacklustre demand dented sentiment.

There were suppliers scaling back TDI asking levels to around $1,700/tonne CFR GCC amid efforts to encourage demand, which was largely characterised as weak.

Reflecting the bearish market as a whole, offers for TDI destined for east African outlets at $1,640-1,680/tonne CFR basis attracted limited buying interest in the week.

Focus article by Melanie Wee