Price and market trends: Europe TDI prices soften

24 February 2014 00:00 Source:ICIS Chemical Business

European toluene di-isocyanate (TDI) contract prices for February have been assessed lower, despite some price rollovers being reported, sources said on 12 February.

Despite initial expectations for steady prices in February on balanced market conditions, further feedback has shown that the overriding price sentiment is soft. This was attributed to plentiful supply and competitive pressure which has overshadowed the rise in the upstream toluene contract price.

Price decreases of €10-40/tonne were confirmed by buying and selling sources with the larger price drops seen as most realistic.

Numbers either side of the range were also reported in a few cases, but there was insufficient market confirmation to substantiate them as a general market level.

One producer said it had initially targeted price increases for margin reasons, but had compromised at a price rollover, refusing to accept any price erosion.


However, other selling sources acknowledged they had also had to accept price decreases in a number of cases.

These sellers and a few buyers said they had agreed to some rollovers, but this was not seen to reflect the general trend.

Sellers remained disappointed with the outcome of TDI price discussions in February in view of the increase in the upstream toluene contract and their need to recoup lost margins amid feedstock increases over recent months. However, the general feeling was that TDI prices in February were determined by market fundamentals rather than feedstock movement.

Material remains readily available amid reasonable, but not great demand and improved reliability in the industry so far in 2014 when compared with the second half of 2013 when some output constraints occurred.

Views on demand were mixed, depending on player. Sellers maintain activity is regular and in line with expectations for the time of year and that February is a shorter working month. One of the producers, however, did note some regional variation, stating that demand was particularly good in eastern Europe and for exports to the Middle East and Africa amid growth potential in these emerging markets. The same source said, by contrast, offtake in northwest Europe remained flat because it is a more mature market.

Buying sources, meanwhile, generally describe downstream demand in the bedding and furniture sectors as satisfactory, but could be better in most parts of Europe. They said although there has been some seasonal improvement, it remains modest and continues to be limited by underlying economic constraints and reduced consumer confidence and spending.

Several players maintain that bedding and furniture demand should be seasonally good in Europe in the first quarter of the year, although one producer contests this, stating that demand should seasonally pick up in Europe in the second quarter.

By Heidi Finch