Methylene Diphenyl diisocyanate (MDI) is used in the manufacturing of Polyurethane, which is utilized to make rigid and semi-rigid foams. MDI finds its usage in industries related to home and refrigerator insulations. The upstream of MDI majorly involves Crude oil and Benzene. The MDI market has been showing positive sentiments in terms of its prices across the globe. The pricing trend of MDI mainly relies upon the downstream demand and changing crude oil prices.

The propelling prices of Methylene Diphenyl Diisocyanate are primarily due to increased upstream costs. As crude oil prices are rising worldwide amidst Russia-Ukraine war tensions, so are the prices of naphtha and Benzene, eventually resulting in surging prices of MDI. Furthermore, fuelling freight charges and shortage of containers added to the already augmented prices of MDI. Besides, the firm downstream demand is another factor causing high prices of MDI. In automotive sector, MDI is used to insulate side windows and windshields; hence the growth in the automotive industry has been escalating the MDI prices. The inclining number of constructions, especially in countries like India, has been largely supporting the price hike of MDI.

In India, the prices of MDI soared by 1.26% in the domestic market and landed at INR 282150/MT Ex-Mumbai in the week ending April 8. MDI prices have consistently been increasing for several weeks in India due to similar reasons related to volatile upstream costs and robust downstream demand. Mirroring the pricing trend of MDI in India, the price value of MDI has been showcasing an upward trajectory in several countries.

According to ChemAnalyst, “The rising crude oil and Naphtha prices are most likely to upsurge the Methylene Diphenyl diisocyanate prices worldwide. Additionally, the price hike would be supported by growing demand for Polyurethane from several end-user industries.”