European Toluene Diisocyanate market remain robust amid supply crunch and low inventory level

In the first half of February 2024, the Toluene Diisocyanate price trend remained firm in the Europe region. The producers increased their quotations by almost 6% amid moderate offtakes and stressed the availability of supplies due to affected production rates and consistent offtakes from the end-user Polyurethane segment.

As per the sources, at the beginning of 2024, the Eurozone's manufacturing Purchasing Manager's Index indicated some improvement and rose marginally due to an increase in new orders, indicating a slowdown in the contraction of the manufacturing sector activities but remained below 50 amid a decline in output rates. The construction sector saw a rise in outlook due to hopes of rate cuts. Simultaneously, the automotive sector saw a new BYD store opening in Berlin as the orders for electric vehicles escalated after Tesla and BYD reduced their prices during the last month. Consequently, the demand for key Polyurethane component Toluene Diisocyanate increased from the PU segment amid increased consumption of Polyurethane foam and coatings in end-user industries.

The previous availability of Toluene Diisocyanate stocks was inadequate in the market as the supply rates were affected by supply chain disruption and increased ship traffic at ship routes Suez Canal and The Cape of Good Hope due to attacks on the vessel and Oil tankers passing through the Red Sea in the Middle Eastern region. Meanwhile, the feedstock Toluene prices surged amid high energy costs and weak availability of upstream Crude Oil supplies due to affected trade and increased shipping durations amid the ongoing tensions in the Middle East. A rebel group attacked the ships sailing through the Red Sea, increasing the ship traffic on the other routes. Consequently, the operating rates at Toluene Diisocyanate units remained moderately low, and the supply rates of Toluene Diisocyanate remained limited in the market, and suppliers raised their quotations.

According to the ChemAnalyst data sources, the Toluene Diisocyanate (T80) FD Hamburg quotations in Germany hovered at USD 2550/MT in the middle of February 2024.

As per the estimation, the Toluene Diisocyanate price trend will remain firm, and prices will increase further in the upcoming week in the European market. The supply rates of Toluene Diisocyanate will remain tight by the regional suppliers as the production rates will remain moderately low in the regional facilities due to the increasing upstream prices. Simultaneously, the imports of Toluene Diisocyanate from the Asian region will be delayed and costly due to supply disruptions and escalation in freight charges.