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Middle East TDI seen firm in Sept on demand, margin recovery
作者:管理员    发布于:2013-11-04 15:58:25    文字:【】【】【

Updated: 2013-09-09 14:05 Source: PUWORLD share:
Middle East toluene di-isocyanate (TDI) spot prices are likely to stay firm in September because of improved demand, output constraints, and sellers’ efforts to recover margin, market sources said on Monday.
"Demand has improved in early September as compared to during the Muslim fasting month of Ramadan in July and early August,” said an industry player.
However, end-users are expected to only buy fresh material on a need-to basis given the stable-to-flat consumption seen in the downstream bedding and furniture sectors, he added.
Meanwhile, a force majeure declared by Borsodchem after its TDI facility in Kazincbarcika, Hungary, encountered production issues has slashed the amount of material available to the Middle East importers, according to a second industry player.
In addition, a South Korean producer has already sold out its September allocations given its limited output, while other producers are still in the middle of discussions for September cargoes, according to sources.
As a result, a local distributer in the Gulf Cooperation Council (GCC) resorted to purchasing cargoes from other Asian producers on the back of the recent production losses in Europe. However, traders said supply remains sufficient in the region.
Looking ahead, market sources said there will be no downward pressure expected on prices as producers are keen to raise their prices in order to recover their profit margins.
On 4 September, discussions in both GCC and East Mediterranean (East Med) regions were at $2,450-2,600/tonne (€1,869-1,983/tonne) CFR (cost & freight) Middle East, with most transactions done at the low end of the range, industry players said.
Most players are confident that the price uptrend will continue in the rest of September, with offers already surpassing $2,500/tonne CFR Middle East this week.
Spot TDI prices rose by $50/tonne for three consecutive weeks to hit an average weekly price of $2,500/tonne CFR GCC/East Med.
This represents a total price increase of $150/tonne, or 6.3%. since the uptrend began in the second half of August, ICIS data showed.
On 15 August, TDI prices were assessed at $2,350-2,450/tonne CFR GCC, down by 20% from the high of $2,950-3,000/tonne CFR GCC hit in March, according to ICIS data.
"TDI price levels have been eroded recently. This is the time to recover some margins even though demand now is flat, prices still firm up,” an European trader said. 
Upstream spot toluene prices in Asia are unlikely to swing downwards in the near-future, following recent gains in the US market, despite persistent lacklustre demand in the key China market, market players said.
In Asia spot toluene prices were hovering at $1,120-1,150/tonne FOB (free on board) Korea since mid-July, amid strong fluctuations in crude oil prices, according to ICIS.
On 6 September mid-day, prices were assessed  as $1,145-1, 152/tonne FOB Korea, up $5/tonne from the previous close of the day, on the back of buoyant US market, ICIS data showed.

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