Shanghai, China – More stable and transparent prices could be the outcome of a new online buying portal for polyurethane materials that Covestro is developing in China.
Senior managers at Covestro outlined how it is developing the portal, how China is playing a key role in the process and how different buying options could take the heat out of price spikes.
They were speaking at a press event here ahead of PUChina 2018 last week.
‘China is a the forefront of the digital customer experience, with products like We Chat mobile payments,’ said Daniel Meyer, head of Covestro’s Polyurethane segment.
There are over 730m people using the internet in China added, Marius Wirtz senior vice president, PUR commercial operations APAC. More than half of the world’s internet users are in Asia and around 70% access the internet by phone,’ he added.
‘You are at the forefront,’ Meyer told the press conference.’ This is why we are launching it here.’
Later Meyer, spoke exclusively to UTECH-polyurethane.com. He explained that customers are helping to design the portal.
Meyer said his company is asking them ‘what would it look like? what would be the bare-bones functionality. This is a totally different approach from Alibaba for example’.
He explained: ‘Our platform is very different for polycarbonate, for TDI for different customer segments.’
‘The platform could also offer blowing agents, surfactants, catalysts and a range of other products; products [that] may not be proprietary to us.’
Talking about the platform’s product slate he said: ‘It is logical that we would go for isocyanate, polyether polyols. We might be willing to partner with aromatic polyester producers; we could think about blowing agents. We could think about additives.’
As a side effect, Meyer believes such a portal may help to take the heat out of pricing highs and lows.
He said: ‘I do understand cyclicality on a large scale, capacity; supply and demand. But I’m confused about the peaks and the troughs and the micro elements in there. There might be good reasons. But, there might be rumours or movement in the market that cannot be explained.’
He believes that with better transparency and the ability to offer fixed price for future deliveries and auctions, then the market for commodities like TDI and MDI could be less volatile.
If the platform takes off then the markets ‘will still be cyclical, that’s the essence of the beast, but less volatility will be in the interests of everybody.’