For the Quarter Ending March 2024
North America
The Methylene Diphenyl Diisocyanate (MDI) price trend showcased upward movement in the North American market during the first quarter of 2024. At the beginning of the quarter, the demand for MDI was firm from the Polyurethane segment as the furniture industry saw a surge in sales due to Presidents' Day deals and increased demand for painted furniture and cabinets. Simultaneously, the inquiries surged for energy-efficient products in the refrigeration industries.
During the mid-quarter, feedstock supplies were affected because of the low availability of upstream Crude Oil stocks in the global market due to production cuts by OPEC+ and rising anticipations of further Oil production cuts by OPEC+ after the cease-fire in the Israel-Hamas War. Simultaneously, the energy sector witnessed escalations in energy costs due to geopolitical tensions and positive economic data. The orders for Polyurethane components MDI rose in the Polyurethane segment amid a rise in demand from the construction sector for stocking purposes amid the anticipation of the revival of construction activities in the North American region with the arrival of spring.
Towards the end of the quarter, MDI prices continued to showcase bullish movement in the USA as orders were firm from the buyers due to the steady demand for Polyurethane components in the manufacturing and construction sectors. In the refrigerators and freezers (cold chain) sector, consumers complained of fridges dying young, which caused a surge in demand for MDI for repair and replacement objectives. At the end of the quarter, MDI Polymeric Grade FOB Louisiana in the USA witnessed USD 2480/MT.
APAC
In the first quarter of 2024, the Methylene Diphenyl Diisocyanate (MDI) price trend shifted movement in the APAC region. At the beginning of Q1, prices declined due to sluggish demand from PU foam manufacturers attributed to a slowdown in the furniture market amid the escalation in the cost of raw materials such as timber and plywood. However, demand improved for stocking purposes before the Lunar New Year holidays in major isocyanate producers in China. During the mid-quarter, South Korean exporters raised the feedstock Benzene costs due to an escalation in demand amid the increase in stock replenishment activities at manufacturing units after the Seollal festival in the country. At the same time, some of the manufacturing units in China went for maintenance shutdown during the Lunar New Year holidays from 2nd February 2024 till 18th February 2024. As a result, MDI prices escalated amid sluggish trading activities and firm demand from buyers like India due to consistent market offtakes during the wedding season and firm consumption of PU materials from the automotive and manufacturing sectors. However, operating rates and trading activities increased after the reopening of the Chinese market. Towards the quarter's end, the air cargo market witnessed increased demand for the third consecutive month in March, fuelled by the expansion of e-commerce and shipping disruptions in the Red Sea, impacting air freight rates and product supplies in the international market amidst moderate demand from buyers. At the end of the first quarter of 2024, MDI Polymeric Grade FOB Qingdao quotations in China settled at USD 1910/MT.
Europe
In the first quarter of 2024, the European Methylene Diphenyl Diisocyanate (MDI) market experienced trends akin to those observed in the North American region. Initially, supply chain delays and extended lead times hindered the availability of resources within the regional market. Demand for Polyurethane (PU) components, particularly MDI, surged amidst consistent consumption of Polyurethane foam and coatings by Automotive manufacturers due to increased orders for electric vehicles following price reductions by industry giants such as Tesla and BYD. Simultaneously, the production rates were affected by elevated energy costs and limited access to Benzene feedstock, exacerbated by supply chain disruptions stemming from heightened tensions in the Middle East. The situation was further complicated by a missile attack on an oil tanker off the coast of Yemen, leading to increased shipping traffic along alternative routes. During the mid-quarter, uncertainties regarding energy security in Europe arose, influenced by a pause in US LNG exports, impacting variable costs across industries. The automotive sector continued to witness heightened demand for lightweight PU materials derived from MDI, attributed to the growing production of electric vehicles. Towards the quarter's conclusion, regional manufacturing units grappled with disruptions to production schedules due to a shortage of skilled labor. It resulted in diminished output rates and escalated operational costs. Additionally, global air cargo demand experienced its third consecutive monthly increase in March, driven by the expanding e-commerce sector and disruptions in shipping routes, particularly in the Red Sea region, leading to fluctuations in air freight rates. Consequently, MDI prices trended upwards again by the quarter's end, with MDI Polymeric Grade FD Antwerp in Belgium assessed at USD 2460/MT.
For the Quarter Ending December 2023
North America
In the North American region, the Methylene Diphenyl Diisocyanate (MDI) experienced a bearish price trend during Q4 2023, with prices declining due to low demand and sluggish manufacturing activities in the Polyurethane segment. This price decrease is attributed to depressed consumption rates from end-user industries. Initially, the demand was for Polyurethane materials from the Automotive manufacturers due to a decline in manufacturing activities amid the United Auto Workers (UAW) strike.
At the same time, the cost support declined on feedstock Benzene at the beginning of the quarter amid weak demand and a decline in WTI Crude Oil prices due to stabilization in speculations around the supply chain disruptions in the Middle East amid conflict between Israel and Palestinian Islamist Group. During the mid-quarter, Methylene Diphenyl Diisocyanate inventories were adequately available in the market, and demand remained low from the Polyurethane segment more significantly after Black Friday sales and a decline in sales in the retail sector due to the depressed consumption rates from the end-user Automotive and manufacturing sectors. Meanwhile, the decrease in Cargo rates, caused by low water levels in the Panama Canal and Mississippi River, negatively impacted trading activities and raised the domestic inventory levels.
The price trend remained persistent towards the end of the quarter amid cautious buying activities from buyers. Conclusively, the low demand from the downstream industries, coupled with the introduction of bio-based Polyurethane, negatively impacted the petrochemical-based Polyurethane and Isocyanates market, and prices witnessed a decrease of almost 15% compared to the previous quarter. At the end of the final quarter of 2023, MDI Polymeric Grade FOB Louisiana in the USA hovered at USD 2083/MT.
Asia
In the Asia-Pacific region, the Methylene Diphenyl Diisocyanate (MDI) market situation was bearish due to low to moderate demand from the downstream industries and a decline in manufacturing sector activities, and prices decreased consistently throughout the final quarter of the year 2023. Initially, the feedstock Benzene prices fell due to a decline in upstream Crude Oil prices amid weakening US and European economies, which reduced the production costs, and production rates remained firm in the region. During the mid-quarter, the procurement activities were reduced from the regional buyers with the arrival of winter and Polyurethane components, and PU materials consumption rates remained sluggish from the end-user Automotive and manufacturing sectors. Towards the end of Q4, the destocking practices by the regional isocyanates producers and sluggish consumption rates from the buyers further tilted the prices in the negative direction. Meanwhile, the MDI consumption rates improved from the PU segment as the regional wood furniture market picked up the pace amid an increase in retail sector sales, and PU foam consumption rates improved in the manufacturing sector. However, at the end of the last quarter of 2023, feedstock availability was affected amid the rise in supply chain concerns through the Suez Canal after the Red Sea attacks in the Middle East region, and MDI Polymeric Grade FOB Qingdao in China hovered at USD 1810/MT.
Europe
Like the North American region, the Methylene Diphenyl Diisocyanate (MDI) market in Europe showcased bearish movement during the fourth quarter of 2023, with prices declining throughout the quarter. The market was primarily affected by low demand from the Polyurethane segment, as well as sluggish manufacturing activities and decreased offtakes from domestic buyers. Initially, adequate availability of supplies and the switching interest of downstream buyers towards bio-based Polyurethane materials negatively impacted the demand from the buyers. During the mid-quarter, MDI supply rates were firm in the regional market as shipping rates were consistent from the European hubs. The Eurozone Manufacturing Purchasing Manager's Index also dropped throughout the quarter, indicating a contraction in the manufacturing sector activities. Meanwhile, Covestro AG, in Brunsbüttel, Germany, with an MDI production capacity of 33333 TPM, went for Force Majeure in November 2023. Towards the end of the quarter, 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 and a decline for Polyurethane foam from the manufacturing sector. Consequently, the consumption of Polyurethane components diminished, and inventory levels remained firm in the market. Conclusively, the Methylene Diphenyl Diisocyanate witnessed a decrease of almost 17% in the region, and at the end of Q4, 2023, the MDI Polymeric Grade FD Antwerp quotations in Belgium accessed at USD 2162/MT.
For the Quarter Ending September 2023
North America
The Methylene Diphenyl Diisocyanate showcased bearish movement in North America, and prices fell by almost 20% during the Q3 of 2023 amid low offtakes due to sluggish manufacturing activities in the downstream Polyurethane segment. At the beginning of the quarter, prices decreased marginally amid the availability of previous stocks and moderate demand as the USA's manufacturing Purchasing Manager's index improved during July 2023. Meanwhile, shipping and freight routes were affected amid the decline in Mississippi and Ohio river water levels and delayed shipping route activities through the Panama Canal. However, a noticeable decrease in MDI prices was observed during the mid-quarter as previous inventories were adequately available amid no improvement in offtakes from the market. The hike in bank interest rates by the Federal Reserve Bank to cool down the rising inflation resulted in a decline in demand from buyers, causing a slowdown in the economic growth of the region. Conclusively, the Methylene Diphenyl Diisocyanate prices in the USA witnessed USD 2440/MT at the end of Q3 of 2023.
Asia
In the Asian region, the Methylene Diphenyl Diisocyanate prices showcased bullish movement and rose by almost 22% during the 3rd quarter of 2023. At the beginning of the quarter, the increment in the prices was nominal. The demand improved from the international buyers due to arbitrage. Meanwhile, the demand from regional buyers was stable initially and rose during the mid-quarter amid the decline in production rates. Two Wanhua Chemical Group MDI plants in China with production capacity 600 KTPA and 500 KTPA went for scheduled shutdown from 15th August 2023 to 23rd September 2023. It stressed the availability of the product in the market. Towards the end of the quarter, the prices remained firm and rose marginally amid improved product availability in key producer China and a simultaneous increase in feedstock Benzene and Aniline prices. The upstream Crude Oil production cuts by OPEC+ resulted in low feedstock availability. At the end of Q3, 2023, Methylene Diphenyl Diisocyanate prices in China hovered at USD 1970/MT.
Europe
Like the North American region, the Methylene Diphenyl Diisocyanate showcased bearish movement in Europe during the Q3 of 2023 amid low offtakes due to sluggish manufacturing and purchasing activities in the Polyurethane segment during the summer holidays in the region. The high energy prices and hike in bank interest rates by European banks resulted in a decline in demand from buyers, causing a slowdown in the Eurozone growth. Consequently, the Eurozone manufacturing Purchasing Manager's Index dropped gradually during the 3rd quarter, indicating contractions in manufacturing sector activities and a decline in procurement activities from downstream Polyurethane buyers. The availability of stocks was firm due to previous cheaper imports from Asia. It resulted in an arbitrage window, and suppliers reduced the quotations in the domestic market during the mid-quarter. Demand was sluggish from the downstream Polyurethane industries due to moderately low orders from the construction sector and electronic appliances manufacturers. Conclusively, the Methylene Diphenyl Diisocyanate price declined by almost 23% during the quarter. At the end of the quarter, the Methylene Diphenyl Diisocyanate prices in the Netherlands and Belgium hovered at USD 2622/MT and USD 2600/MT, respectively.
For the Quarter Ending June 2023
North America
The Methylene Diphenyl 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 Benzene prices rose initially due to increased costs support from upstream Crude Oil. But due to the reduction in Crude Oil demand from the mid-quarter amid the temperature rise, the feedstock Benzene prices fell and reduced the production costs of MDI. At the end of the quarter, Methylene Diphenyl Diisocyanate prices in the USA witnessed USD 3020/MT.
Asia
The Methylene Diphenyl 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, MDI prices decreased slightly amid intensified buying activities before the Dragon boat festival. The feedstock Benzene prices increased initially after the announcement of oil production cuts by OPEC+. However, the decreased fuel consumption with temperature rise reduced the Crude Oil and fuel demand, which reduced the upstream cost support on feedstock Benzene and production costs of MDI. Simultaneously, the decrease in feedstock Aniline prices throughout Q2 further reduced the cost support on MDI. At the end of Q2, 2023, Methylene Diphenyl Diisocyanate prices in China witnessed USD 1738/MT.
Europe
In the European region, the price trend of Methylene Diphenyl Diisocyanate remained steady, and prices were decreased 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 supplies from Asia 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 feedstock Benzene prices were firm initially and declined from the mid-quarter and reduced the production costs. Simultaneously, the reduction in Natural Gas prices decreased the variable costs during quarter 2 of 2023. At the end of the quarter, the Methylene Diphenyl Diisocyanate prices in the Netherlands and Belgium witnessed USD 3360/MT and USD 3335/MT, respectively.
For the Quarter Ending March 2023
North America
The MDI price trend showcased bearish movement throughout the first quarter of 2023. 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 Federal Reserve Interest rates throughout the quarter to curb rising inflation made the buyers conscious while making purchases. Consequently, at the end of Q1, prices remained stagnant and fell marginally amid weak offtakes and firm inventory levels. At the end of the quarter, Methylene Diphenyl Diisocyanate prices in the USA hovered at USD 3150/MT.
Asia
In Asia, the MDI 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, feedstock Benzene costs rose due to stressed availability and shifting upstream costs amid volatile crude oil prices. However, MDI prices stabilized at the end of the quarter due to declined orders. At the end of Q1, 2023, Methylene Diphenyl Diisocyanate prices in China settled at USD 2390/MT.
Europe
Throughout quarter 1 of 2023, the MDI 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. In the H1 of the quarter, feedstock Benzene prices rose due to increased upstream Crude oil prices. At the same time, significant decreases in the Dutch TTF natural gas costs reduced the cost support and input prices. At the end of the quarter, the Methylene Diphenyl Diisocyanate prices in Germany and Netherlands hovered at USD 3435/MT and USD 3845/MT, respectively.
For the Quarter Ending December 2022
North America
Throughout quarter IV of 2022, Methylene Diphenyl Diisocyanate prices fluctuated in the North American region. Initially, the product prices increased due to increased feedstock Aniline and Benzene prices due to high upstream costs amid rising inflation and consistent demand and offtakes 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 the black Friday sale. However, in the mid-quarter, the price trend shifted, and MDI 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. In the final month of Q4, the product prices decreased again on the back of stable to low offtakes. Conclusively at the end of Q4 2022, Methylene Diphenyl Diisocyanate prices in the USA settled at USD 3280/MT.
Asia
At the beginning of quarter 4 of 2022, Methylene Diphenyl 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. 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 were affected by China's exporters due to covid restrictions. The product prices increased due to affected feedstock supplies by the petrochemical exporters and impacted production rates. Conclusively, Methylene Diphenyl Diisocyanate prices in China settled at 2200/MT at the end of Q4 2022.
Europe
Methylene Diphenyl 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 TDI supplies. Consequently, the orders and offtakes remained moderate from the downstream Polyurethane producers. However, in the mid-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. Towards the end of the quarter, product prices decreased again due to a drop in offtakes by downstream buyers. At the end of Q4, MDI prices in Germany settled at USD 3580/MT.
For the Quarter Ending September 2022
North America
An oscillating price trend of MDI was observed in the USA during quarter 3 of 2022. In the first half of Q3, the product prices decreased due to a decline in production costs caused by the plunge in feedstock Benzene prices. However, in the final month of Q3, the price movement shifted, and product costs increased due to an improvement in production costs amid no significant improvement in demand from downstream PU producers. Subsequently, post witnessing a decrease of 3% in the previous quarter's values, Methylene Diphenyl Diisocyanate prices in the USA settled at USD 3410/MT at the end of Q3, 2022.
Asia
Throughout the third quarter of 2022, MDI prices decreased consistently in the Asian region. Decreased feedstock Benzene costs reduced the product's production costs and eased cost pressure. At the same time, the orders from domestic and international PU producers were low, and the product inventory levels increased on the back of reduced offtakes due to cautious buying sentiments by the downstream processors. Additionally, the depreciation in the currency values of major producers like China due to the economic slowdown amid frequent lockdowns negatively impacted the product's values. At the end of the quarter, MDI China discussions settled at USD 2290/MT after an average quarterly decrease of almost 12%.
Europe
For the 1st two months of Q3 2022, MDI prices decreased in Europe due to a decrease in the feedstock Benzene prices and a subsequent decrease in product production costs while the demand remained firm from downstream PU producers. However, in the final month of Q3, the trend shifted, and the price inclined upward amid no significant improvement in demand. Additionally, the high inflation depreciated the Euro values against the US Dollar, more significantly towards the end of the quarter, due to which product prices rose during the final month of Q3 amid low domestic inventory levels. Key producers curtailed their productions amid high energy prices and rationing of input supplies by the exporters. After a decrease of 5.4% in the previous quarter's prices, MDI discussions in Germany settled at USD 3620/MT at the end of Q3 2022.
For the Quarter Ending June 2022
North America
In the North American region, the price trend of MDI remained fluctuated in Q2 amid volatile market dynamics. During the first half of the quarter, the price of MDI decreased continuously due to the reduction in demand for Polyurethanes (PU) from the domestic construction sector. However, in the 2nd half of the quarter, upsurging feedstock Benzene prices and upstream natural gas prices resulted in increased cost pressure on upstream and production costs of materials. Hence, prices remained strong towards the end of Q2, and after a quarterly decrement of 9%, MDI Polymeric grade FOB Louisiana price settled at USD 3730/MT in Q2 of 2022.
Asia
The price trend of MDI descended, and prices decreased consistently in the Asian region. China is a key manufacturer of MDI in Asia. Due to the lockdown in China, amid their Zero Covid policy and container clogging at Shanghai port, excess material inventory decreased MDI price in domestic and other regional importing countries, including India. However, after an ease in lockdown and the reopening of the Shanghai port in June after the Dragon Boat festival, manufacturing and trading activities accelerated with increased offtakes of material from regional importers. Post a quarterly decrement of 8.6%, the price of MDI FOB Qingdao got settled at USD 2590/MT at the end of Q2 in Asia.
Europe
In the European region, the price of Methylene Diphenyl Diisocyanate (MDI) remained strong with a consistent upsurge in the values. In the 1st half of the quarter, prices upsurged sharply post inflation due to increased feed Benzene values amid the volatile market fundamentals and upsurging Crude oil prices in the region. Upstream Natural gas prices were also increasing, resulting in cost pressure along with high transportation costs. The offtakes of material seen stable with consistent demand from the end-user Polyurethane in furniture industries and the construction sector. After a quarterly increment of 9.1%, MDI Polymeric Grade FD Hamburg assembled at USD 4000/MT at the end of Q2.
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
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.
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.
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.
