SINGAPORE (ICIS)--Southeast (SE) Asia spot prices of toluene diisocyanate (TDI) for April are poised to reverse a declining trend and firm up in the near future as demand improves resulting in higher discussions and deals.
Following a period of relentless price dips in the first quarter, spot prices for April-loading cargoes are unlikely to register further declines as sellers sought to recoup and safeguard previously-eroded margins, sources added.
According to ICIS data, spot prices in the first quarter had tumbled from an average of $2,050/tonne CFR (cost & freight) SE Asia on 2 January to $1,725/tonne CFR SE Asia on 27 March, as ample cargo availability weighed on pricing.
The initial price declines subsequently hampered buying interest, leading buyers to lose confidence in procurement on a spot basis from January till March.
The Lunar New Year festive period in February further weighed on cargo uptake, leading to an extended period of tepid demand for TDI in southeast Asia.
Prices eventually bottomed out in late March, ICIS data showed.
April shipment cargoes were offered at significantly firmer prices compared with March, at $1,850-1,900/tonne CFR SE Asia.
Earlier deals seen in the week ending 10 April were already at $1,830-1,880/tonne CFR SE Asia, further cementing sellers’ confidence in the current price uptrend.
A regional trader said in the near term the prices are gaining strength and likely to rise further.
The Vietnamese market was described as one of the more active spot markets for April cargo uptake, according to market players.
April-loading discussions remained ongoing for some other market participants.
“Demand in southeast Asia is comparatively stronger (than China and India) and buyers are also noticed to be negotiating at firmer price levels. For now, talks remain underway for some of us,” said a northeast Asian trader in Mandarin.
TDI is mainly used for the production of polyurethane (PU) flexible foams used in upholstery, mattresses and automotive seats.
Focus article by Jasmine Khoo