Urethane Forecast in the Middle East
June 25, 2021
Middle East’s petchems largely face oversupply, sluggish demand
Author: Felicia Loo
SINGAPORE (ICIS)–Middle East’s petrochemicals are broadly facing a similar trend of ample supply and thin demand, and this is likely to persist through the summer season.
The markets are largely blighted by weak sentiment; this is primarily due to excess supply as well as a slowdown in demand in the summer months.
Sizzling red-hot temperatures are archetypal during summer in the Middle East, so there is reason for a summer lull and supply is expected to increase as production slowly normalizes after months of shortages due to tight feedstock availability.
In addition, there are hopes of a nuclear deal with Iran that is leading to expectations that Iran exports will increase in the coming months.
Middle East Group I base oils show ample cargo availability, with Group I Iran supply expected to increase in the coming weeks.
There are minimal known maintenance shutdowns so far among base oils producers located in the Middle East through the second half of the year.
There was some talk in the market of an Iranian producer due to undergo maintenance shutdown, but it could not be immediately confirmed.
Meanwhile, spot supply for Group I and Group II are improving, albeit slowly.
Concerning polymeric methylene diphenyl diisocyanate (PMDI) and toluene diisocyanate (TDI), demand in the Middle East is expected to remain tepid through the summer season.
A similar picture is painted when it comes to polyether polyols in the Middle East, where demand remains tepid amid vessel shortages and increasing freight costs from northeast Asia to the Middle East.