Tight DEG supply could support polyester polyols hike proposals

21 May 2014 23:40 Source:ICIS News

HOUSTON (ICIS)--It is too early to define the outcome of price increase initiatives for polyester polyols, industry participants said on Wednesday, noting upward pressure from upstream diethylene glycol (DEG).

A producer announced polyester polyols price increases of 7 cents/lb for aromatic grades, citing rising raw material costs. The proposed hikes are intended for 15 June or as contracts allow.

Another producer announced increases of as much as 7 cents/lb depending on grade for aliphatic polyester polyols effective 1 June, or as contracts allow, driven by feedstock and manufacturing costs.

Meanwhile, polyester polyols prices are expected to remain stable through the end of May amid balanced supply and demand.

If implemented partially or in full, in some cases the increases may not take effect before July, as some contracts are on a quarterly basis.

Demand for polyester polyols is gauged as strong, particularly in board stock and spray polyurethane foam (SPF) applications during the peak construction season, sources said.

Upstream DEG supply is expected to continue tightening as US sellers take advantage of arbitrage windows in China and Europe, sources said. US DEG contract prices rose by 2 cents/lb in May and by 1 cent/lb in April.

Polyester polyols prices are assessed at $1.18-1.48/lb DEL (delivered) in bulk.

Among polyester polyols producers in the US are Stepan, Huntsman, Invista and COIM.

By Ron Coifman