Methylene Diphenyl Diisocyanate Prices See Marginal Decrease Amid Softened Global Demand

In June 2023, the prices of Methylene Diphenyl Diisocyanate experienced a slight decline worldwide. This can be attributed to stable buying activities and an ample supply of inventories resulting from weakened global demand from end-users. The hike in interest rates by the European Central Bank during June and the US Federal Reserve during H2 of the month made the buyers conscious while making purchases, and they avoided any unnecessary trading activities.

In the European region, the available inventory levels of Methylene Diphenyl Diisocyanate were adequate due to the increased export rates by the Asian exporters during the previous quarter because of the arbitrage opportunities amid limited procurement activities from buyers. Concurrently, in the US market, the declined offtakes in the manufacturing sector to produce Polyurethane foam raised the domestic inventory levels. Simultaneously, the Eurozone and USA's manufacturing Purchasing Manager's index dropped again during June 2023 and remained below 50, indicating further contraction in manufacturing activities.

Meanwhile, the demand for Methylene Diphenyl Diisocyanate was moderately low from downstream Polyurethane sealants and coatings producers due to depressed operational activities in the construction and electronics industries.

At the same time, production costs of Methylene Diphenyl Diisocyanate decreased, and the feedstock Benzene prices declined amid volatile upstream Crude Oil prices and sluggish demand from downstream buyers. Simultaneously, the decline in input costs due to decreased Natural Gas prices amid subdued demand and high inventories eased the cost support on Methylene Diphenyl Diisocyanate. Similarly, the feedstock Aniline prices remained bearish in the international market and decreased noticeably in Europe and the US market during June 2023.

In the Asian region, the price of Methylene Diphenyl Diisocyanate remained stable during June and dropped marginally amid volatile upstream Crude Oil prices, which supported the feedstock Benzene prices and contraction in Aniline costs amid depressed offtakes from buyers. The orders for Methylene Diphenyl Diisocyanate were inadequate from downstream Polyurethane sealants and coatings producers amid stable activities in the construction and electronics industries.

Towards the end of the month, the trading activities intensified, and suppliers limited their supply rates amid an improvement in the procurement activities before the Dragon Boat Festival in China, the key producer and exporter of Isocyanates. According to the National Bureau of Statistics, China's manufacturing PMI improved slightly and was recorded at 49, indicating a marginal improvement in manufacturing activities during June 2023.

As per the ChemAnalyst database, the Methylene Diphenyl Diisocyanate prices in Germany and the USA witnessed a monthly decrease of almost 2% and hovered at USD 3310/MT and USD 3020/MT, respectively. Meanwhile, Methylene Diphenyl Diisocyanate prices in China were USD 1738/MT.

As per the estimation, the consumption rate of Methylene Diphenyl Diisocyanate will increase from Polyurethane elastomer and coatings producers during the 3rd quarter of 2023. Meanwhile, the supply rates will remain moderate, and China will decrease its international exports due to anticipated improvement in the demand from regional buyers.