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Surging Demand Spurs Price Hike for Methylene Diphenyl Diisocyanate in the USA
Surging Demand Spurs Price Hike for Methylene Diphenyl Diisocyanate in the USA

Surging Demand Spurs Price Hike for Methylene Diphenyl Diisocyanate in the USA

  • 06-Mar-2024 2:38 PM
  • Journalist: Jai Sen

The Methylene Diphenyl Diisocyanate (MDI) price continued to showcase bullish sentiments in the USA during February 2024, and producers raised their quotations by 9.2% due to an increase in demand from buyers and supply deficiency in the regional market amid affliction in production and supply chain activities.

According to reports, the Purchasing Manager's Index (PMI) for manufacturing in the USA saw a rise in February 2024, staying consistently above the threshold of 50. This uptick was driven by an increase in new orders, production levels, and output rates across the country, signaling continued enhancement in manufacturing sector operations. During the month, the furniture industry saw a surge in sales due to Presidents' Day deals and increased demand for painted furniture and cabinets. Simultaneously, the orders surged for energy-efficient products in the refrigeration industries. Consequently, the orders for MDI were firm from the Polyurethane segment amid a surge in demand for Polyurethane materials from the construction and manufacturing sectors.

At the same time, the production costs of MDI escalated due to an increase in the feedstock Benzene prices because of firm demand from buyers amid increasing manufacturing sector activities in the region and a simultaneous increase in the upstream WTI Crude Oil prices due to a surge in demand from the international markets. The availability of Crude Oil stocks is low in the global market due to the production cuts by 1 million barrels/day and rising anticipations of Oil production cuts by OPEC+ after the cease-fire in the Israel-Hamas War.

Simultaneously, the production rates of MDI were affected by the moderate availability of feedstock Aniline supplies from the Asian exporters amid the supply chain delays and longer supply durations from Asia, along with high freight charges, impacting the domestic productions of MDI. Additionally, the energy sector saw a rise in oil prices due to geopolitical tensions and positive economic data. Overall, it raised the production costs of MDI.

According to the ChemAnalyst data sources, the MDI Polymeric Grade FOB Louisiana quotations in the USA witnessed USD 2487/MT at the end of February 2024.

In the North American market, the MDI prices will increase further towards the end of the first quarter of 2024. As per the estimation, the supply rates of MDI will remain tight in the regional market due to affliction in domestic production rates during the month as the feedstock Aniline supplies were moderately available due to the limited exporters from the Asian exporters. Simultaneously, the demand for MDI is anticipated to remain firm from the Polyurethane segment as the orders for PU materials will increase from the Automotive sector amid high demand from buyers.

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