April flex polyols prices likely stable, market yet to react to C3

26 March 2014 16:45 Source:ICIS News

LONDON(ICIS)--European flexible polyols prices are likely to roll over in April, but market players expressed differing views about market fundamentals and participants are now digesting an initial €10/tonne hike in feedstock propylene prices, market sources said Friday.

Producers in western and southern Europe were expecting a rollover in polyols prices before the initial propylene settlement came through, but remained hopeful that some increases could be achieved.

“I don’t expect much change for propylene in April,” a western European producer said. “Demand [for flexible polyols] is quite good for most applications [and there is] balanced to tight supply. Looking for a minimum rollover to some increases [of] €20-30/tonne.”

A rollover was expected by a second producer, while a third producer said it had just started negotiations and will wait for the final propylene settlement before making a decision. Demand, they said, has been balanced to good. A central European producer is looking for increases of €30-50/tonne.

Buyers, on the other hand, had a differing view on demand levels.

“[Demand in western Europe] is reasonably good but not great due to a still fragile economy in Eastern Europe,” a buyer said. “[The polyols market] normally slows down in Q2 [second-quarter] but [it is] not clear yet.”

Before the initial propylene settlement came through, the buyer said that it may have to accept an increase its in flexible polyols purchase prices if it saw a rise in propylene prices.

A second buyer expects the market to be stable, as it is experiencing weak demand and high availability .

“It would be difficult to justify [an increase for polyols] even if propylene goes up,” the second buyer said. It noted, however, it has yet to speak to its suppliers regarding April price levels.  

According to ICIS data, the range for flexible polyols is €1,760-1,830/tonne free delivered (FD) northwest Europe (NWE) and remains representative of March business. The initial propylene settlement settled at €1,140/tonne FD NWE for April, a €10/tonne increase from March. The final settlement confirmation remained pending at the time of writing.  

By Stefan Naidu