Underwhelming Market Sentiments Decreased Toluene Diisocyanate Prices in the European Market

In the prime week of 2024, the Toluene Diisocyanate price trend remained stagnant in Europe as the regional suppliers did not change their Toluene Diisocyanate quotations amid the moderate availability of supplies in the market. Meanwhile, the market did not showcase any significant improvement in inquiries amid the ongoing economic slowdown in the region, and consumption rates remained moderately low in the Polyurethane segment. At the same time, the Toluene Diisocyanate key feedstock Toluene prices decreased during the week amid weak offtakes and volatility in the upstream Brent Crude Oil prices because of a rise in supply chain concerns through the Suez Canal amid the conflicts in the Middle East region.

As per the sources, the Eurozone's manufacturing Purchasing Manager's Index showcased some improvement and rose marginally in the concluding month of 2023, indicating a slight slowdown in the reduction of the manufacturing sector activities but remained below 50 due to the decline in output rates and sluggish buying activities from the buyers. The production rates were stable, and the Toluene Diisocyanate offtakes remained moderate from the domestic buyers.

At the same time, sources indicated that the Wood Furniture market in the European region was negatively impacted due to the bursting of a housing bubble, causing a decline in the demand for wood furniture. Consequently, the orders declined for Polyurethane foam from the manufacturing sector negatively impacted Toluene Diisocyanate consumption rates in the domestic market. On the contrary, the demand of Toluene Diisocyanate for Polyurethane slightly picked up the pace in the Automotive industries due to an increase in new registrations and sales after Tesla's announcement that the company is going to compensate for the withdrawn subsidies by the European Government on EV vehicles.

Meanwhile, last week, the cost support eased on feedstock Toluene due to declined demand from the downstream value chain, and it reduced the Toluene Diisocyanate production costs. The Toluene Diisocyanate price trend shifted during the second week of January 2024 and continued its bearish movement as observed during the previous weeks in the region. According to the ChemAnalyst data sources, the Toluene Diisocyanate (T80) FD Rotterdam prices hovered at USD 2450/MT in the Netherlands at the end of the second week of January 2024.

Meanwhile, in the Middle East, the Houthi Rebels in Yemen attacked the vessels in the Red Sea, causing an increase in ship traffic and commercial vessels rerouted to the Cape of Good Hope. It impacted the upstream Crude Oil availability in the international markets.

As per the estimation, the Toluene Diisocyanate prices will decline further in the European region as offtakes will likely remain sluggish from the Polyurethane segment amid moderate activities in the manufacturing sector. Furthermore, the increased use of Bio-based Polyurethane components will negatively impact the Toluene Diisocyanate demand amid stable supply rates as attacks in the Middle East region will not affect the product supplies to the regional market.