TDI – US August market steady after July softening
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US toluene di-isocyanate (TDI) prices softened by 5 cents/lb in July, following several increases implemented during the first half of the year, industry sources said during the week ended 3 August.
US TDI prices were assessed up from 148-165 cents/lb DEL in bulk on 5 January of 2011 to 178-198 cents/lb on 27 July, on implementation of several initiatives during the first half of the year, according to input from market participants. TDI values dropped by 5 cents/lb in July, as assessed in the above tables.
Participants said the July decline was driven by moderate demand through the production chain, the slow US economic recovery and a weak global TDI market, but they expect a steady market in August.
Participants in flexible and rigid applications are projecting stronger seasonal activity in August and September, while sources in the automotive sector said demand was disappointingly flat in July.
US July auto sales increased 1% year on year, according to data released by Autodata on 2 August. US July auto sales were 1,059,601 units, up from 1,050,101 units in July 2010 and 1,053,248 units in June 2011. Among the six biggest auto manufacturers in the US – Ford, General Motors, Chrysler, Toyota, Honda and Nissan – the largest year-on-year growth came from the US-based companies. Chrysler showed the biggest gain, jumping by 20% year on year, to 112,026 units in July 2011 from 93,313 units from the same period a year ago. Ford showed a growth of 9% year on year, and GM showed a growth of 8% year on year.
In feedstocks, US n-grade toluene price discussions were at $3.80-3.87/gal FOB on 29 July, sources said. The range was tighter compared with $3.75-3.90/gal FOB in the previous session. Discussions were at $3.75-3.85/gal FOB on 26 July.
NYMEX WTI crude futures closed at $91.93/bbl on 3 August, down by $1.86/bbl for the day, and down from $97.40/bbl on 27 Jul. US crude futures finished down for the fourth consecutive session in response to the weekly supply statistics from the Energy Information Administration (EIA) showing a build in crude and refined products inventories. The stock market initially fell on economic data showing slowing economic expansion, but eventually recouped the losses and moved into positive territory.
NYMEX natural gas futures closed at $4.090/MMBtu on 3 August, down from $4.370/MMBtu on 27 July.
| NYMEX Closing | 13 Jul | 20 Jul | 27 Jul | 3 Aug |
| Crude Oil Front Month (US$/bbl) | 98.05 | 98.14 | 97.40 | 91.93 |
| Natural Gas Front Month (US$/MMBtu) | 4.403 | 4.500 | 4.370 | 4.090 |
Outside the US, TDI from the US was quoted at $2,600-2,650/tonne CFR Pacific coast of South America, according to sources. Industry participants, however, were slow in purchasing on expectations of softening offers. TDI from Asia, particularly from China and Korea, was offered into South America more aggressively at $2,500/tonne CFR, sources said. TDI from Argentina into neighbouring countries stood at $3,000/tonne DEL.
In Europe, initial indications for August TDI are for stable-to-softer prices on abundant supply and weak demand from summer shutdowns and the low bedding/furniture season, despite the uptrend in feedstock costs.
In Asia, the TDI spot market hit an impasse between producers protecting margins and buyers anticipating further price declines.
MDI – Steady market projected for August
The methyl di-p-phenylene isocyanate (MDI) market was stable in July, and is projected to remain steady in August, sources said.
Participants said healthy volumes of MDI moved in July in lamination board stock applications. The sources said the trend is expected to continue into August, despite the summer lull and a slow economic recovery. Demand in other sectors, such as spray polyurethane foams (SPF), was moderate, sources said.
MDI price increases of 2-5 cents/lb were implemented in early July, depending on contract terms and starting point, with no weakness detected into August, sources said.
In feedstocks, US benzene spot prices were discussed at $4.23-4.33/gal FOB on 3 August, down from $4.32-4.40/gal FOB in the previous session. The decline was in line with the sell-off in energy. Benzene prices were at $4.12-4.14/gal FOB on 27 July, $3.73-3.76/gal FOB on 5 July and $3.74-3.76/gal FOB on 20 June.
August benzene contracts were confirmed settled at $4.13/gal on 29 July, up by 44 cents/gal from July on the back of stronger benzene spot prices, volatile energy and lower benzene production rates during the month.
Outside the US, MDI prices in Latin America are pegged at $2,100-2,300/tonne FOB USG.
In Europe, MDI prices are likely to remain steady this month because of long-term contracts, despite an increase in the upstream benzene price for August.
In Asia, polymeric MDI prices fell this week by $10/tonne on weak fundamentals and concern over a slowdown in the global economy.
($1 = €0.70)
This week on ICIS ( www.icis.com ):
02/08/2011 20:20 Argentina investigates possible PVC, polyether polyols dumping
01/08/2011 06:07 Asia benzene hits three-year high, up $30-35/tonne
29/07/2011 16:51 US August polymer-grade propylene nominated up 3 cents/lb
29/07/2011 06:16 UpdateAsia toluene hits three-year high on benzene, tight supply
28/07/2011 09:46 S Korea’s Kumho Mitsui to raise MDI output by 45,000 tonnes/year
