Expensive to Import, Hard to Sell: The Middle East PU Market’s Supply-Demand Squeeze

October 27, 2026 4 min read

The Middle East PU market continues to face a difficult balance. Local supply remains limited, while replacing it with imports is expensive. Chinese-origin TDI and PMDI prices have stayed firm, supported by high import costs, but downstream manufacturers are struggling to absorb those prices. Material is still moving into the region; the difficulty is selling it at a workable price and in meaningful volumes.

Buyers are keeping purchases close to current production needs. For traders, committing to a costly cargo involves both a high landed cost and the possibility that customers will delay orders by the time it arrives. These pressures have kept the market active enough to meet immediate requirements, but without a broader recovery in demand.

Firm import prices meet cautious buyers

Mid-October price indications show how costly replacement supply remains for GCC buyers:

TDI and PMDI indications were broadly unchanged recently. Flexible polyol prices were also stable after Chinese export quotations rose earlier in October. The lack of another increase offers buyers some relief, but current levels remain difficult for many downstream businesses.

TDI illustrates the problem particularly well. Chinese-origin imports continue to play a major role in GCC supply, yet flexible foam producers have resisted higher prices and kept orders focused on immediate production. PMDI faces a similar limit: restricted regional availability supports firm import indications, while cautious purchasing prevents that firmness from turning into stronger trade. For flexible polyols, stable offers have likewise brought little incentive for buyers to rebuild stocks while affordability remains a concern.

Limited local supply keeps the region dependent on imports

Sadara’s PU production has not returned to normal. Although a small part of the large complex is operating, that activity has not restored regular local MDI, TDI and polyol supply. Earlier expectations of a broader return by the end of September have given way to continued uncertainty over when these materials will again be available consistently.

Local stocks can cover some customers, particularly established buyers in Saudi Arabia, but buyers across the wider Middle East still rely on traders or direct imports. That dependence leaves them exposed to Chinese supplier prices, shipping costs and delivery times.

Market reports have also suggested that Dow may consider selling its 35% stake in Sadara. Aramco, already the majority owner, has been mentioned as a possible buyer and could become the sole owner if it acquired Dow’s stake. Some in the market wonder whether the unresolved ownership discussions are contributing to the cautious pace of production, although there is no confirmation of a connection. For buyers, the immediate issue remains the absence of a dependable return of local PU supply.

Freight keeps replacement costs high

Ocean freight from China to the Middle East remains expensive. Recent quotations for a 40-foot container imply an ocean freight cost of roughly $400 per tonne to Jebel Ali and around $500 or more per tonne to Saudi destinations, assuming a 23-tonne cargo load.

Freight has stayed high even without a sharp further increase in recent weeks. Saudi routes carry a particularly heavy burden. Inland transport, handling and other charges can add to the cost, while long transit times make it harder for traders to match incoming cargoes to customers’ changing needs.

This freight table shows the shipping burden on an illustrative container load. Across all three products, though, expensive logistics remain a central part of the region’s supply problem.

High costs continue to restrain downstream demand

The market’s difficulty is not simply a shortage of material. Downstream manufacturers also need finished-product orders that justify buying expensive raw materials. Flexible foam, insulation and other PU users are sensitive to both the product price and the cost of getting it delivered. When those costs rise faster than customers will accept, manufacturers limit purchases and avoid building inventory.

This leaves the market in a persistent squeeze. Restricted local production and costly imports keep TDI, PMDI and polyol replacement prices firm. At the same time, weak downstream purchasing limits trading volumes. Buyers may need material for current orders, but many have little reason to commit to larger quantities at today’s costs.

Conditions differ across nearby markets. Egyptian activity has improved in some areas, yet available stocks and competitive local offers continue to restrain prices. In East Africa, high material costs and shipment delays have affected affordability, although the approaching seasonal period could bring more activity. Neither market should be used as a direct measure of Gulf demand, but both show how supply costs and customers’ ability to pay can pull prices in different directions.

What could change the balance?

A sustained return of local PU production would reduce dependence on costly imports. Lower Chinese-origin product prices, cheaper freight or both would make replacement material more affordable for downstream manufacturers. Demand is unlikely to strengthen substantially unless buyers can obtain raw materials at delivered costs their own customers can support.

Until that happens, the Middle East PU market is likely to remain caught between firm import prices and restrained purchasing. Cargo can move, but expensive supply is still proving hard to sell.

https://www.pudaily.com/news/67731/expensive-to-import-hard-to-sell-the-middle-east-pu-markets-supply-demand-squeez