For the Quarter Ending March 2022
North America
Prices of Methylene Diphenyl Diisocyanate (MDI) fell in North America during the Q1- 2022, on the back of bearish downstream demand. The offtakes of MDI in furniture, footwear or other Polyurethane based industry were significantly lower during the considered period, which resulted in weaker demand for MDI, and hence its reduced-price value. Besides, the level of inventories was sufficient to cater to the overall demand, which further dropped Methylene Diphenyl Diisocyanate (MDI) prices. Thus, in the USA the evaluated price of MDI Polymeric Grade at FOB Texas was USD 3325/MT during January, which got constraint to USD 3210/MT in the month of February.
Asia Pacific
Asia-Pacific region witnessed an upsurge in the prices of Methylene Diphenyl Diisocyanate (MDI) during the quarter 1 of 2022, on account of firm downstream demand and increased upstream cost. Due to enhanced consumption of Polyurethane in construction, automotive, and furniture industries, the offtake of MDI escalated in the domestic market. In addition, skyrocketed crude oil prices and intensified logistic charges exacerbated the MDI prices in Asian countries. Conclusively, the assessed price value of Methylene Diphenyl Diisocyanate marked a hike of 4.26% from the prices of MDI in February.
Europe
Mirroring the trend of Methylene Diphenyl Diisocyanate (MDI) in North America, prices of MDI fell in European countries as well during Q1 of 2022. In Germany, prices of Methylene Diphenyl Diisocyanate (MDI) were assessed at FD Hamburg was USD 3695/MT during February and showcased a decrement of 4.51% in January. The prime reason behind this price decline was decreased inquiries for Polyurethane from automotive, construction and furniture industries, which impacted the demand for MDI in the domestic market.
For the Quarter Ending December 2021
North America
The MDI market demonstrated bullish outlook throughout the fourth quarter of 2021 with gradual growth trajectory. The market struggled to keep pace with sturdy demand in foams, adhesives, and coatings sectors owing to curtailed output and rallying feedstocks amid the damage repair work in Ida hurricane-affected Louisiana refineries. The resolutely high freight costs also added to the concerns of the market traders and manufacturers. October witnessed curtailed operations at recently resumed Huntsman MDI facility located at Geismar Louisiana, which exacerbated the supply tightness to further extent. The consistent offtakes in the downstream sector continued to exert pressure on the manufacturers who opted for positive price revisions. Still maintaining the uptrend with prices hovering around USD 3445/MT FOB Louisiana, a stagnancy entered the market in the later weeks of December as the market saw relief from lowering aniline feedstock prices and improving supplies upon the start of BASF’s second phase of MDI expansion project at Geismar which increased MDI output by one-third.
Asia
Asian MDI market encountered the domino effect of stronger feedstocks upon global tightness in upstream crude oil, as the prices skyrocketed during October and November. China productions got hampered with the implementation of the “Dual Control Policy” and power outages due to energy shortages. In India, the downstream polyurethane enquiries hiked beyond estimation as the festive time purchase activity gained pace during October. Unlike in China, the demand for MDI for polyurethanes used in the automotive sector in the rest of Asia showed firmness despite declining growth amid the critically low semiconductor chip availability. December brought relief in prices with the weakening upstream market and improving spot activities. However, China witnessed turnarounds at Wahua Chemical’s MDI Phase I (400 KTPA) and Phase II (800 KTPA) facilities at Ningbo site during December. The MDI prices during December in India reached USD 3424/MT Ex-Mumbai, down by 2.9% from the prices assessed during November.
Europe
The European market, in Q4-2021, suffered heavy blows from factors like raw material tightness, crippled trading with the scarcity of spot vessels, energy crisis, and unplanned shutdowns. Meanwhile, the housing and construction sectors, which continued to perform well, maintained healthy offtake volumes from the MDI market. Productions reduced drastically with the imposition of force majeure on the Hungarian MDI facility by BorsodChem during mid-November. With one after another setback, the market stood under a tight spot with incessantly rising prices of MDI in Q4. In Germany, the prices during December were assessed at USD 3785/MT FD Hamburg.
For the Quarter Ending September 2021
North America
The price curve of Methylene Diphenyl Diisocyanate (MDI) witnessed an uptrend in the domestic markets of North America backed by the consistent demand from the downstream plasticizers, insulator, and housing sectors. The MDI market continued to stay disrupted due to shortages of raw material in the region. Lack of market supply, even though most plants were reported to be online, and issues in sourcing of raw materials, plus high freight costs and truck shortages added an upward pressure on MDI prices. Tight supply was exacerbated by the occurrence of hurricane Ida in late August. Production went significantly down as the BASF facility in Geismar, Louisiana shut down operations in the aftermath of the hurricane. Consequently, BASF announced force majeure on MDI during the quarter.
Asia
The prices of MDI rose effectively in the Asia Pacific region in the third quarter of 2021. A hike in the demand was observed from the downstream industries during the quarter in major economies including China and India. In India, MDI prices climbed up during the month of July due to steep surge in the international prices. Disrupted supply activities from the major manufacturers caused by the global scarcity of raw materials shot up the prices of Isocyanates in the global market. However, the demand for MDI in the Indian market remained sturdy in Q3, due to the recovery in major sectors like automotive. CFR JNPT (India) pricing of MDI escalated from USD 2332/MT to USD 2464/MT in Q3 2021.
Europe
In the European region, MDI supply remained more or less unchanged from Q2 as production continued to be disrupted and availability remained low in the third quarter of 2021. Covestro was reported running its European units at reduced rates to complete maintenance. However, on 2nd July, the operator declared force majeure at its 200 KTPA MDI Brunsbuttel, Germany plant. An increment in the prices of MDI was observed in Q3 and was last assessed at USD 3375 per metric tonne FD Hamburg in September.
For the Quarter Ending June 2021
North America
On the back of firm offtakes and unstable supply, price hike for MDI was induced in the market of USA during this quarter. Demand for MDI remained effectively firm from plasticizers, insulator, and housing sector in USA. Therefore, after gaining upward momentum in early May, price of MDI reached USD 2850/MT by the end of June in USA. In addition, soaring freight cost also intensified the prices of MDI in USA during this timeframe, supported by lower inventory level after winter devastation in the country. Thus, prices rose consistently throughout the quarter, which hovered around USD 2825/MT for polymeric grade during final week of June in USA.
Asia
MDI demand in Asia varied with country over country, during this quarter, as demand pattern was different for major economies like India and China. In China, export demand for polymeric MDI remained high during the month of May, while the month over month growth of around 35.7% in exports was observed. Meanwhile, the demand from Indian market dented in May and June, as under the pandemic demand vanished from the downstream polyurethane segment. Under the movement restrictions in the country, Indian consumers were focusing on the essentials rather than opting for furniture related goods. Therefore, prices of MDI were assessed at USD 3360/MT in China and USD 3694/MT in India during the month of June.
Europe
Demand for MDI remained stable to firm during this quarter, supported by inadequate availability of feedstock chemicals in the region. Scarcity of raw materials increased the prices of MDI European market during this quarter, while demand fundamentals remained firm from downstream polyurethane to keep up the overall market sentiments across the region. In addition, major producers like Covestro operated on lower capacity, where producers diverted cargoes to USA to cater their domestic need.
For the Quarter Ending March 2021
North America
North America’s PEG production efficiency was reduced to its lowest level during Q1 2021 due to rare climate calamity caused across the region. Extreme shortage of MDI and TDI was observed around the Texas, due to several plant shutdowns. Major MDI manufacturers were unable to run their plant operations under the extreme cold snap and hence had to announce force majeures on their plants across the gulf. Covestro announced force majeure at its 330 KTPA MDI unit in Texas. Several other plants in Texas, Louisiana, Mississippi, and Florida were down due to the weather conditions. Due to acute material shortage, major manufacturer like BASF raised their MDI prices by 224.7 USD/MT for pure MDI, in February 2021 across the region.
Asia
The Asian market also experienced the impact of global MDI shortage and faced price rise in major upstream products. The global shortage and insufficient domestic production of upstream products like formaldehyde led the prices of MDI to rise in the Asian markets, like in India where prices of MDI rose by 4.41% within the quarter and settled at USD 3771.91/MT during March. In addition, Chinese lunar holidays led to curtailed production at facilities across the countries, that reduced the inventory levels of major producers of the country and contributed to creating the regional shortage of MDI.
Europe
European countries witnessed tight supply for MDI amidst strong demand from the downstream polyurethane sectors. Majorly, the demand was rising from the construction sector, which was taking support from the government funding for sectoral growth. Amid strong demand, availability remained low due to reduced imports from the US gulf and insufficient production activity across Europe, which prompted double-digit price increases. During March however, prices lost momentum, as industrial activities across US started to resume to its original pace.
For the Quarter Ending December 2020
Asia
In October 2020, world’s largest MDI manufacturing company Wanhua Chemicals established its new coal-based methanol plant with 600 KTPA capacity in China which would be used to produce MDI and other related products. During November 2020, tropical storm in the US Gulf Coast interrupted the production of feedstock as various manufacturers were compelled to implement a plant turnaround under government norms. This affected the supply of the product across the globe leading to a considerable rise in its prices in major Asian economies like China and India. Towards the end of Q4, prices returned to normalcy as several production units came onstream after a prolonged turnaround. In India, massive investment plans rolled out by a chemical giant across the downstream polyurethane segments are likely to improve the regional MDI demand in the upcoming quarters.
North America
Sentiments remained uplifted after BASF Corporation announced expansion of its MDI plant from 300 KTPA to around 600KTPA in Louisiana. Later in the quarter, the company revealed the completion of the first phase of this mega-plant expansion. US faced huge shortage of upstream Methanol from across the region following the disruption caused by the seasonal hurricanes in Q2, it eventually forced companies to increase their Methanol imports by 79% in November, which laid a direct influence on the prices of its derivatives like MDI. In addition, global surge in the prices of feedstock Formaldehyde triggered a direct impact on the prices of MDI towards the quarter ending December 2020.
Europe
Demand for MDI remained feeble in Spain during last quarter of 2020 due to decline in demand from the automobile sector, one of the key consuming sectors of MDI. As per the latest statistics, automobile sector of Spain contracted by around 19% in November 2020. In order to save it from further losses, UK and many European countries rolled out several global level schemes. Manufacturers raised their outputs backed by consistent efforts of the government amid anticipations of the automotive sector’s strong revival in the upcoming quarter that may improve the regional MDI demand.
