Bearish sentiments continue for European Toluene Diisocyanate amidst demand concerns

The Toluene Diisocyanate prices have continued following the September trend in October 2023 too, as the product prices are observed to be falling in the Eurozone. The offtakes are appreciably declining from the downstream Polyurethane segment, and supplies are excessively available in the regional market. The data shows, introduction of bio-based Polyurethane have been negatively impacting the petrochemical-based Polyurethane and isocyanates demand in the end-user industries. Consequently, the Toluene Diisocyanate prices has declined by around 13% since the beginning of the month.

The previous inventories of Toluene Diisocyanate were adequately available in the regional market amid no significant improvement in offtakes from regional buyers. The Toluene Diisocyanate consumption rates remained low from the domestic buyers amid the decline in retail sector sales index by 0.8% during the previous month.

The hike in bank interest rates by European Central Bank at the end of September 2023 resulted in a decline in demand from buyers, causing a slowdown in the Eurozone growth. Simultaneously, the increase in Consumer Price Index during the last month indicated rise in inflation and raised the product prices. Consequently, Toluene Diisocyanate procurement activities remained stable as buyers consciously made decisions while making purchases and avoided unnecessary buying activities. Consequently, Toluene Diisocyanate demand tiled in the negative direction during the month, and orders remained low from the regional buyers.

Simultaneously, the feedstock Toluene is consistently declining in the European region amid declined offtakes after the hike in bank interest rate by the European Central Bank. It reduced the upstream cost pressure and eased down the production costs of Toluene Diisocyanate and quotations from the suppliers.

According to the ChemAnalyst database, the Toluene Diisocyanate in Germany prices witnessed at 2660/MT at the end of the 3^rd week of October 2023.

As per the assessment, the demand for Toluene Diisocyanate will likely remain low from the downstream Polyurethane industries during the first half of quarter 4 of 2023. As per the sources, Covestro has recently announced that it is expanding its Platilon brand films capacity, a biobased thermoplastic Polyurethane in Bomiltz, Germany. It will use a bio-based hot-melt adhesive film on Castor oil to make TPU films. The biobased TPU films can be widely used to Polyurethane foam to fabricate car interiors, outdoor clothing, parts of electric appliances, foam strays for the construction sector. It will replace the commercial petrochemical-based Polyurethane and isocyanates in the manufacturing and construction sector, and consumption rates will decline for Toluene Diisocyanate with time.