Price and market trends: Europe TDI contracts soften on supply, competition

21 April 2014 00:00 Source:ICIS Chemical Business

European toluene di-isocyanate contract prices have generally fallen in April amid ongoing good supply, signs of seasonal slowdown in demand and the resulting strong competition among sellers, market players said on 9 April.

This price reduction in TDI in April marks a consecutive price drop seen over the last three months.

The softening in the upstream toluene contract price in April was also contributing to the bearish sentiment, although to a lesser extent than market fundamentals.

Price decreases of €10-50/tonne were mentioned for TDI in April, although price drops of €30-40/tonne were considered most realistic.

To reflect this, TDI contract prices were assessed down at €1,990-2,070/tonne FD (free delivered) W (western) Europe, according to ICIS.


Numbers below the range were also reported in a few cases, but they were not seen to reflect the general market level.

The ICIS range refers to average-to-small volume players, which typically purchase 1,000-8,000 tonnes per year, according to ICIS methodology.

Rollovers were also reported for TDI in a few cases, but they were not seen to reflect the general market trend.

A few suppliers said they had achieved rollovers and not accepted reductions of more than €20-30/tonne, but the latter was not widely confirmed. A few sellers said they had largely seen price decreases of €30-40/tonne in April, although one said it had refused to accept a bid of minus €50/tonne.

The market remains well-supplied amid good plant reliability and export opportunities not being that attractive because of exchange rate fluctuation and strong competition from Asian suppliers over recent months.

However, one supplier suggested this could change based on feedstock related output constraints for one Asian supplier, as well as maintenance plans for others in Asia.


Views on demand are mixed, depending on source, location in Europe and end-sector.

Some buying sources said demand into the main downstream bedding and furniture sectors is lower in April than in March, on the back of good weather conditions in Europe diverting consumers’ focus from the interior and purchasing beds and furniture.

One customer said it is seeing an earlier seasonal slowdown than normal this year for weather-related reasons. It added it was hopeful some bedding and furniture fairs, which typically take place in the Netherlands over the Easter holidays, which take place later in April, may help to stimulate some buying activity.

On the other hand, a few producers maintain that flexible demand remains at a good level in Europe, suggesting they had seen little-to-no evidence of any seasonal slowdown.

Flexible demand from the bedding and furniture sectors traditionally slows in the second quarter, although the timing of this varies, depending on source. Some sellers acknowledged that while there may be slightly reduced activity as normal over the Easter period, one said it is in line with expectations.

There are some reports that bedding and furniture activity from eastern Europe continues to fare better than northwest Europe, which remains flat. This is attributed to eastern Europe being less seasonally affected than northwest Europe, as well as the emerging growth potential in eastern Europe.

One source said while it has regular volumes from its customers in the bedding and furniture sectors in April, activity in the downstream automotive sector is robust.

By Heidi Finch