Polyether Polyol Contracts to See Positive Revisions in North America on Rising Propylene and Ethylene Prices

Polyether Polyol market in the USA, which had gained the long-sought footing in the price trends during December after reaching extremities during the start of Q3-2021, is again amid tumult with the sudden surge in ethylene and propylene feedstock prices. According to the ChemAnalyst database, the Polyether Polyol prices in the USA hovered around USD 4230/MT for Mol. Wt. 3500, and USD 4180/MT for Mol. Wt. 3000 FOB Texas, during December 2021.

The surge in propylene and ethylene feedstock prices got triggered by a fire eruption at the gasoline production unit in the Baytown refinery of the USA giant ExxonMobil on 23rd December 2021. The Baytown facility, which houses the fourth-largest oil refinery in the country, also boasts an olefin production plant and a chemical production plant at the site. Following the fire, the company has shut its gasoline unit and curtailed the operation rates of other units in the facility. As a result, a supply shortage in the downstream polyol market has become prevalent, causing the olefin raw materials prices to rally. Quoting the struggle in procuring raw materials at escalated costs, the USA-based specialty chemicals major, Stepan Company, has revised Polyol prices, up by USD 441/MT, effective from January 1st, 2022. Another instalment of price revision in polyol contracts by the company will be seen from February 1st, 2022, further inching up the prices between the range of USD 66/MT and USD 352/MT depending on the product grade.

As per ChemAnalyst, the recent turn in the events has put Polyol and its downstream market in the doldrums. The price revision by Stepan is expected to encourage other manufacturers in the region to follow suit to save a substantial margin on Polyol supplies. In the backdrop of supply tightness and price rise of feedstocks, the prices of Polyol are anticipated to take a forward leap of approximately 10% during Q1-2022 in North America. As the demand from the downstream polyurethane sector remains buoyed, the positive revisions may not affect the Polyol offtakes, which are expected to stay consistent to keep up with the consumer sentiments. However, the end-user consumers may feel an extended pressure on their pockets in the new year.