PRICING Global MDI and TDI markets face supply tightness and varied demand

October 16, 2024 01:00 PM

MDI North America
The MDI market has been under pressure due to tight supply and demand continues to be healthy. Dow was reported to have declared force majeure at its 340 ktpa MDI plant in Freeport, Texas after hurricane Beryl and the turnaround is expected to be lifted after the producer completes a turnaround at the site in October. Demand for MDI has remained stable from most sectors. The construction sector is seeing good levels even though stats showed a decline in the housing sector. Prices could remain high as supply is tight due to turnarounds and demand is steady. 

MDI Europe
The MDI market has been quiet as the holiday season was underway. Supply is still available even though operations have been reduced. Borsodchem maintenance at its MDI unit in Kazincbarcika, Hungary started at the end of July and completed mid-August. Huntsman is planning to have a turnaround at its Rozenburg, the Netherlands site in Q4. Covestro is reported to have its annual turnaround at its 400 ktpa MDI plant in Brunsbüttel, Germany during September. Demand was weak due to the holiday season in most of Europe. Demand from the insulation and other construction related applications are heard to be improving. Demand from the comfort industry is still weak. Demand from all sectors is expected to pick up somewhat from September as the market resumes after the summer period. 

MDI China
The Chinese domestic MDI market price showed an upward trend in ​Q3 due to low supply availability. MDI units operated at around 50% capacity in August. On the demand side, there was little change in downstream orders, as the macroeconomy environment remained weak. Buyers reported that MDI prices remained high in the market. Most procurement was for immediate use, primarily in traditional industries such as foaming agents, spraying, and asphalt. 
 
TDI North America
The TDI supply situation in North America is heard to be stable and reports suggest supply is currently on the long side. Demand remains stable, with offtake volumes from the construction sector reported as steady. In terms of TDI prices, prices ended August on the softer side due to low demand levels and healthy supply. TDI prices are expected to be stable to higher in the short term as supply is expected to tighten somewhat in Q4 due to turnarounds.

TDI Europe
TDI supply in Europe has been reduced and is not expected to improve leading to price firming. Covestro is reported to have its annual turnaround at its TDI plant in Brunsbüttel, Germany during September. Demand has been slow over the last couple of months in some southern European countries as downstream plants were shut for the summer holidays. A summer slowdown had been expected but this year it has been worse than previous years. Demand usually picks up again in September as downstream plants return to operation following the summer holidays but so far this has not been the case. August was the weakest month of the year and September levels are really low so far in the month.

TDI China
The Chinese market firmed in August due to low supply levels as maintenance turnarounds took place at a number of plant. TDI units operated at around 50%. News of these significant maintenance activities spurred increased market activity, pushing prices up in August. However, a lack of further orders from buyers stabilised prices as the end date of the maintenance approached, TDI price softened in the last few days of August. Downstream demand remained weak in line with the traditional off-season. Upholstered furniture buyers maintained a high inventory level and resisted the price increase.

Polyether Polyols North America
The polyether polyol market in the US is balanced and stocks are being rebuilt and availability is sufficient. In general though, the supply/demand picture for polyether polyols remains balanced, and there are no reported problems with availability. Demand has been steady again in August, as it has been for much of the year so far. Demand for rigid polyether polyols into construction and appliances is stable and expected to remain so over the next few months. Demand into auto applications is also said to be steady but lower than expected. Demand for flexible polyether polyols into furniture and bedding is described as stable.
 
Polyether Polyols Europe
The polyether polyol market slowed further in August as demand declined. Supply levels are stable even though there are production issues upstream. A market participant mentioned concerns about PO availability, as there have been operational issues at some PO plants recently. Consumers say that the impact of these PO production issues on polyols, thus far, has been limited as inventories are sufficient to meet current demand levels. Demand has weakened during the summer months and a modest increase in demand is expected for September/October.

Polyether Polyols China
In China, polyether polyols prices have softened due to fluctuation in PO markets and weak demand. On the supply side, operating rates remain stable, and supply also remained steady. Polyether polyols prices softened due declining PO prices. Although buyers showed stronger purchasing intent mid-August, the increase in offtake volumes was not sustained, and prices eventually resumed their downward trend. Demand for polyether polyols saw non-significant improvement. Export orders remained robust, but major manufacturers are supply mostly to long-term contracts and adopted a wait-and-see attitude. Procurement in the distribution channel was mainly for immediate use.

Regina Sousa is a senior consultant at Tecnon Orbichem. 

https://www.utech-polyurethane.com/information/pricing-global-mdi-and-tdi-markets-face-supply-tightness-and-varied-demand