Europe polyols initial September contracts agreed with further rollovers

13 September 2017 17:30 Source:ICIS News

LONDON (ICIS)--European polyols market players have settled more September contracts at rollovers, sources said this week.

However, previous contracts had been settled at both increases and decreases, according to sources.

The flat prices observed this week have been attributed to producers having sufficiently wide margins, although in Italy some increases have also been reported.

Business in Italy has been disrupted due to transportation issues along Germany’s Rhine rail route.

Rail operator Deutsche Bahn announced the closure of the route on 12 August due to the collapse of the Rastatt Tunnel.

Consequently, direct trains from petrochemical hubs in Rotterdam, the Netherlands and Antwerp in Belgium bound to Italy have been running at lower capacity and reduced frequency with the reopening date of the Rastatt construction site set for 7 October.

Apart from these logistical issues, a firmer September propylene contract was said to have been offered as an argument for higher pricing.

Nonetheless, sources said it did not, ultimately, place upwards pressure on pricing.

Demand has generally been described as strong, although, a buyer said that order book volumes have increased, yet, not as much as is typical.

Meanwhile, participants have expressed concern about higher isocyanate and polyols prices recently, which have resulted in a compression of margins for some companies.

End users are also looking at alternatives, with some isocyanate and polyols buyers receiving push back from customers.

This is in spite of the fact that the August polyols contract was assessed at €1,700-1,785/tonne FD (free delivered) NWE (northwest Europe) with the low end rolling over and the high end of the price range softening by €15/tonne.

Polyols are often reacted with isocyanates to make polyurethanes, which are used to make mattresses, foam insulation for appliances (refrigerators and freezers), home and automotive seats, elastomeric shoe soles, fibres and adhesives.

By Pavle Popovic