Europe April TDI price ideas stable-to-soft on mixed demand/supply

26 March 2014 17:37 Source:ICIS News

LONDON (ICIS)--European toluene di-isocyanate (TDI) contract price indications for April are stable-to-soft, as mixed views on demand are being weighed against generally good supply, market players said on Wednesday.

Some producers remain firm on price stability in April, as they weigh up what they consider to be healthy demand against comfortable supply.

One of the suppliers said it continues to target a price rollover for April, but acknowledges that discussions are proving tough amid good availability and the resulting pressure for modest price reductions.

Another seller and some buying sources consider price softening highly likely on long supply, which they attribute to weak domestic demand and some talk of competition with Asian suppliers for export activity to the Middle East and Africa.

The bearish sentiment in the upstream toluene market is also likely to contribute to some downward price pressure for TDI in April, added one buyer.

Views on TDI activity in the main downstream bedding and furniture sectors continues to be mixed, depending on source and region.

One producer maintained that demand in Europe has been healthy in the first few months of this year. Another manufacturer had also previously said that downstream flexible foam activity remained good, with particular buoyant activity noted in eastern Europe and Russia, and in certain export markets, although the latter has not been widely confirmed.   

One customer noted that bedding and furniture demand from eastern Europe continues has held up reasonably well, with little adverse effect on activity, despite tension in Ukraine. It noted, however, that German demand remains reasonable but not great, which it attributed to talk of some ongoing economic fragility.

Another buyer suggested that demand is slowing in parts of Europe on the back of various economic, seasonal and political factors, adding that it has seen activity in eastern Europe dented by the turmoil in the Ukraine, although the latter was not widely confirmed.

Some players refer to the fact that offtake from the downstream bedding and furniture sectors tends to slow in Europe into the second quarter, although this view was not held by all market players.

Demand from the downstream automotive sector has been positive during the first quarter, according to one main TDI consumer, a view backed by the latest European Automobile Manufacturers’ Association (ACEA) data, which showed that EU registrations for new passenger cars rose by 8% month on month in February.

861,058 new passenger vehicles were registered during the month, representing the sixth consecutive month of increasing car demand in the EU. Demand increased in all major markets with the exception of France, ACEA added. Despite the growth, the figure stands as the second-lowest of any February since 2003, when ACEA began to record passenger vehicle registration figures for the enlarged EU.

European TDI contract prices have softened in March by €20-30/tonne on average, taking values to €2,030-2,100/tonne FD Western (W.) Europe, according to ICIS data. Larger price reductions and rollovers were also heard, but they were not widely confirmed.

By Heidi Finch