News Code : 43032

US polyether polyol prices were assessed 3 cents/lb ($66/tonne) higher, tracking rising propylene feedstock costs.

Petrotahlil:

The main driver behind the recent upward movement in polyol prices is stronger propylene feedstock costs. Propylene contracts settled 4.5 cents/lb higher in May, ending a period of nine consecutive months in which propylene contracts settled with either a rollover or a decrease.

Propylene contract prices were pressured higher by easing stock pressure as well as higher spot prices during the month of May.

Spot propylene prices have opened the month of June on a declining trend as sluggish derivative demand and sufficient supply levels are weighing down sentiment in the spot market.

The US polyether polyol market is structurally long and prices tend to follow the direction of upstream propylene markets with a lag of one to two months.

Increase initiatives of 7-8 cents/lb had been under discussion in the market, reflecting an anticipated rise in feedstock costs as well as compressed margins on the part of polyol producers.

Following the rise in propylene contracts, increase initiatives were at least partially implemented in many cases, ending a prolonged period of flat to declining prices in the polyol market.

ICIS had assessed polyether polyol prices lower by a cumulative amount of 14 cents/lb between late November and early April, reflecting significant downward movement in upstream costs during the fourth quarter of 2018 and the first quarter of 2019.

Producers have been facing compressed margins in recent months as they had not been able to fully reflect the sharp rises in propylene costs which occurred during the first half of 2018.

Demand for downstream polyurethane systems has not grown as quickly as it had in the past year owing to slower demand from the automotive and furniture and bedding sectors as well as an underperforming high season in the construction sector.

Polyols are reacted with an isocyanate to produce polyurethane foams.

Polyether polyols are used in cushioning applications such as furniture, bedding and car seats, as well as commercial refrigeration and packaging.

Major US producers of polyether polyols include BASF, Dow, Covestro and Monument Chemical.

END

Send Comment

view latest news
More News