For the Quarter Ending June 2023
North America
The Hexamethylene Diisocyanate prices slumped in the North American region during the Quarter 2 of 2023. The offtakes remained sluggish from the downstream Polyurethane industries due to weak activities in the construction sector during Q2 of 2023. Simultaneously, the demand was low, but due to the rising recession and layoff practices, producers and traders increased restocking practices amid increased labor costs. Meanwhile, increased logistics costs provided cost support during the mid-quarter. However, due to the depressed demand in the international market, the traders started destocking practices towards the end of the quarter, which raised the inventory levels, and suppliers decreased their quotations noticeably in the region. At the same time, the feedstock Butadiene prices rose initially due to increased price quotations from producers amid an escalation in costs support from upstream. But due to the reduction in upstream Naphtha demand from the mid-quarter, the feedstock Butadiene prices fell and reduced the production costs of HDI. Furthermore, the normalization in freight costs towards the end of the quarter reduced the costs support on the product.
Asia
The Hexamethylene Diisocyanate price trend showcased bearish movement during quarter 2 of 2023. The demand was low from regional and international importers due to the sluggish activities in the Polyurethane sector and firm availability of supplies. Simultaneously, the consumption rates from Polyurethane elastomer and coating producers remained inadequate throughout the quarter due to the inactive construction sector. Meanwhile, the strengthening of the US Dollar and the weakening of the other currencies impacted the product prices in the international markets. Towards the end of the quarter, HDI prices decreased slightly amid intensified buying activities before the Dragon boat festival. The feedstock Butadiene prices fell appreciably throughout Q2 due to the weak upstream Naphtha costs and sluggish demand from the downstream buyers. It reduced the upstream cost support on feedstock Butadiene and production costs of HDI. Simultaneously, the decrease in feedstock Adiponitrile prices throughout Q2 further reduced the cost support on HDI. Furthermore, the decline in input costs due to reduced consumption amid temperature rise reduced the variable cost of production during the quarter.
Europe
In the European region, the price trend of Hexamethylene Diisocyanate remained the same as the previous quarter, and prices were consistently by producers and suppliers as the demand was low from downstream Polyurethane sealants and coatings producers due to sluggish activities in the construction and electronics industries. At the end of the quarter, the decline in prices intensified amid firm availability of inventories and reduced buying and manufacturing activities in the region. The hike in bank interest rates by the European Central Bank and the Bank of England to curb rising inflation made the buyers conscious while making purchases, and they avoided any unnecessary trading activities. Meanwhile, the upstream Ammonia prices declined from the mid-quarter due to low cost and sluggish demand from fertilizer producers. Simultaneously, the reduction in Natural Gas prices during Q2 decreased the variable costs and reduced the production costs of HDI. Furthermore, towards the end of the quarter, feedstock Butadiene prices declined amid reduced cost support from upstream Ethylene and sluggish demand from downstream buyers.
For the Quarter Ending March 2023
North America
The Hexamethylene Diisocyanate (HDI) price trend showcased bearish movement throughout the quarter, and prices decreased consistently throughout the quarter. In the H1 of the quarter, prices fell amid depressed orders from Polyurethane industries due to surplus availability of supplies. During the mid-quarter, Supply chain activities improved with the temperature rise. At the same time, increases in US Federal Reserve Interest rates throughout the quarter to curb rising inflation made the buyers conscious while making purchases. Furthermore, cost support declined amid a consistent fall in upstream Ammonia prices and moderate production rates. Consequently, at the end of Q1, prices remained stagnant and fell marginally amid weak offtakes from downstream industries.
Asia
In Asia, the HDI price trend remained firm throughout quarter 1 of 2023. During the H1 of the quarter, prices escalated due to limited inventory levels and consistent demand from the downstream sector. The prices rose noticeably during the mid-quarter amid firm orders for PU foam in the manufacturing sector due to increased demand for furniture in the retail sector. At the same time, upstream Ammonia prices amid weak demand from fertilizer producers. However, orders fell from the downstream PU industries during the end month of the quarter, and producers declined their production rates, which stabilized the price trend at the end of Q1, 2023.
Europe
Throughout the first quarter, the HDI price trend remained bearish, and quotations consistently decreased by the suppliers amid the surplus availability of supplies. At the same time, the demand was low from downstream Polyurethane industries due to weak orders for PU foam in the construction and automotive sector. At the same time, significant decreases in the Dutch TTF natural gas costs reduced the input prices. Simultaneously, the upstream Ammonia prices fell amid depressed demand from fertilizer producers and a significant reduction in natural gas costs, which eased the cost support. Consequently, amid stable production rates, the Hexamethylene Diisocyanate price trend stabilized in the final month of Q1, 2023.
Throughout quarter IV of 2022, Hexamethylene Diisocyanate prices fluctuated in the North American region. Initially, the product prices increased due to increased feedstock Nitric Acid and Ammonia prices due to high upstream costs amid rising inflation and consistent demand and offtakes of products from the downstream Polyurethane industries. The orders for the Polyurethane form were firm from the manufacturing sector during H1 of Q4 due to expected consumer demand from the automotive producers and furnishing mills because of upbeat consumer sentiment. However, in the mid-quarter, the price trend shifted, and HDI prices decreased on the back of increased inventory levels due to reduced import orders and a reduction in the upstream costs due to a decline in the WTI Crude oil prices. Finally, at the end month of Q4, the product prices decreased further on the back of low offtakes from end-use industries.
At the beginning of quarter IV of 2022, Hexamethylene Diisocyanate prices increased amid affected supplies and firm demand from regional and European importers. In the mid-quarter, the prices started declining due to weak trading activities and an increase in domestic inventory levels in China because of disruption in the supply chain amid zero covid controls and limited transportation activities. At the end of Q4, product prices showed mixed sentiments amid destocking practices by the exporters at the end of the year. However, the exports to the overseas market were also affected by covid restrictions, and the product prices increased due to affected feedstock supplies amid supply chain disruption and decreased production rates.
Hexamethylene Diisocyanate prices shifted throughout the Q4 of 2022 in the European region. At the beginning of Q4, the product prices increased slightly amid affected production rates in the downstream Polyurethane industries due to the unavailability of HDI supplies. Consequently, the orders and offtakes remained moderate from the downstream Polyurethane producers. However, in the H2 of the quarter, the product prices declined due to a reduction in offtakes by downstream buyers on the back of reduced orders for PU from the household goods producers. Finally, towards the end of the year, product prices decreased again due to off-season dullness in offtakes by downstream buyers.
