Falling Feedstock and Input Costs Decrease the Polyurethane Prices in Europe

As per data, the prices of Polyurethane components, i.e., Polyol, Toluene diisocyanate, and Methylene Diphenyl Diisocyanate, have consistently reduced in the European region. As per the analysis, this decreasing trend is the continuous slump in the Dutch TTF natural gas futures in the past few weeks. In the previous quarter, Natural gas prices soared in the region after the Russia-Ukraine war and the explosion at the Beixi pipeline.

The recent ease in the leap of Europe Natural gas prices resulted in the decline in input and energy costs and reduced the cost pressure on production costs of petrochemicals and Polyurethane components. Furthermore, the key feedstock Propylene costs have also been reduced due to increased upstream Naphtha prices.

Throughout January, Toluene Diisocyanate prices declined in Europe due to firm inventory levels amid weak demand from domestic industries. Orders decreased from the downstream Polyurethane producers on the back of diminished demand for furniture foam due to a shift in consumer demand sentiments. Similarly, during January, Methylene Diphenyl diisocyanate prices decreased amid increased domestic inventory levels and reduced offtakes from manufacturing industries and household goods producers.

Consequently, the Polyurethane component Toluene Diisocyanate (T80) FD Antwerp settled at USD 4220/MT after a reduction of 0.5% in the last week's costs. Simultaneously, post witnessing a decrease of 0.7% in the previous week's discussions, Polyurethane component Polyether MW 3000, μ 400-650 FOB Hamburg prices settled at USD 2870/MT.

Furthermore, Eurozone manufacturing Purchasers Manager's Index remained below 50 in December amid relief in inflationary pressure, indicating a manufacturing contraction. At the same time, the Polyurethane key component Toluene Diisocyanate supplies have improved in the domestic market compared to the previous quarter after the restart of facilities in the region which went for shutdown after the shortages of input supplies.

As per the ChemAnalyst estimation, "The prices of Polyurethane components are expected to remain low amid stable demand and sufficient inventory levels."