Methylene Diphenyl Diisocyanate Prices Show Bearish Trend in US and Europe Amidst Low Demand
- 14-Aug-2023 3:28 PM
- Journalist: Stella Fernandes
The Methylene Diphenyl Diisocyanate prices decreased marginally amid the end of the destocking practices by the domestic suppliers. In the USA, the supply rates remained weak due to affected US shipping and freight routes amid the decline in Mississippi and Ohio river water levels. Meanwhile, domestic inventory levels rose amid low offtakes from buyers. Meanwhile, the Methylene Diphenyl Diisocyanate stocks in Europe were firm due to the availability of imported materials from Asia at low prices during the previous quarter.
The Methylene Diphenyl Diisocyanate demand in the US market was sluggish from the downstream Polyurethane industries due to moderately low inquiries of Polyurethane foam and PU sealants from the manufacturing and construction sector. Meanwhile, an improvement in orders was seen from the housing sector during the month. Conclusively, USA's manufacturing Purchasing Manager's index rose during July 2023 but remained below 50, indicating a slowdown in contraction in the manufacturing sector activities.
Similarly, the demand for Methylene Diphenyl Diisocyanate in Europe was sluggish from Polyurethane industries due to moderately low orders from the construction sector and electronic appliances manufacturers. At the same time, Eurozone's manufacturing Purchasing Manager's index declined again during July 2023 and remained below 50, indicating further contractions in manufacturing sector activities.
Meanwhile, the plunge in Methylene Diphenyl Diisocyanate prime feedstock Benzene costs during the month amid oversupplies and depressed offtakes from downstream manufacturers reduced the upstream cost support. Simultaneously, the strengthening of the US dollar declined the import prices of feedstock Aniline and decreased the production costs of Methylene Diphenyl Diisocyanate.
As per the ChemAnalyst data sources, in the USA and Germany, the Methylene Diphenyl Diisocyanate prices dropped by 2.3% and 1.8% and hovered at USD 2950/MT and USD 3250/MT, respectively.
In June, the hike in bank interest rates by US Federal Reserve and the European Bank made the buyers conscious while making purchases, and they avoided any unnecessary trading activities. Consequently, Methylene Diphenyl Diisocyanate prices decreased due to globally softened demand from the end-user consumers.
As per the estimation, an increase in logistics duration amid disruption in supply chain activities amid Hurricane season in the USA and lower freight volumes will boost the cost support on feedstock Aniline and will impact the production rates of Methylene Diphenyl Diisocyanate. The overseas demand for Methylene Diphenyl Diisocyanate will likely improve with the beginning of quarter 4 of 2023 as consumption rates will improve due to a rise in Polyurethane foam demand from the manufacturing sector and furniture producers before the Black Friday sale.