The Urethane Blog

Polyol Discussions

More US July increase initiatives emerge for polyols

11 June 2018 17:03 Source:ICIS News

HOUSTON (ICIS)–An additional July increase initiative has emerged in the US polyether polyol market, ICIS learned on Monday.

Photo by Design Pics Inc/REX/Shutterstock (5498299a)Polyurethanes are made from polyols.

A seller announced a price increase of 13 cents/lb ($287/tonne) effective as of 1 July or as contracts allow. Other sellers have separately announced increases of 8-9 cents/lb effective as of 15 June, 1 July or as contracts allow.

Price increase initiatives for polyether polyols are being driven by a surge in feedstock propylene prices. May propylene contracts settled 5 cents/lb higher from April, marking the first increase in propylene contract prices since January.

Meanwhile, spot prices for propylene have continued to rise, leading some market participants to predict that June propylene contracts might settle around 5-6 cents/lb higher from May, although no firm nominations for June contracts have surfaced yet.

US polyether polyol prices are heavily influenced by movement in propylene costs and generally track movements in propylene prices with a lag of around one to two months.

Buyers are offering resistance to polyol increase proposals, arguing that they are already facing significant margin compression following a prolonged period of steadily rising prices for polyurethane raw materials.

Buyers had been hoping to obtain some price relief after propylene contracts settled lower for three consecutive months between February and April. Buyers may argue that, as they did obtain a price decrease while propylene costs were falling, they should not be expected to pay higher prices now that the propylene market has reversed direction.

ICIS has raised its assessments for US polyether polyols by a cumulative amount of 6 cents/lb since the start of 2018.

Major US producers of polyether polyols include DowDupont, BASF, Covestro and Hunstman.

https://www.icis.com/resources/news/2018/06/11/10230533/more-us-july-increase-initiatives-emerge-for-polyols/