For the Quarter Ending June 2021
The supplies in the North American region improved in comparison to the previous quarter owing to the restoration of the industrial infrastructure in the USA Gulf Coast, after the devastating impact of the polar storm. In second half of the quarter several production issues erupted at major TDI plant marginally hindered the supply fundamentals. Demand observed gradual improvement from the downstream paints and coating, and several other end use segments as the region witnessed seasonal hike in building and construction activities. However, the prices witnessed an uptrend with FOB Texas prices reaching USD 3840 per tonne in June.
Overall, the market outlook in Asia Pacific slumped during the second quarter of 2021. Supplies were constrained in the Northeast Asian region as crackers were shut in South Korea Kumho Line 3 and Japan’s Mitsui Chemicals plant due to the scheduled turnarounds in the second quarter. In China, government-imposed consumption tax on several imported heavy aromatics commodities. The tax was followed by the increment in freight rates due to container shortages and difficult trading environment. Offtakes were narrowed as the demand from PU segment witnessed decline due to off season sentiments, however situation eased with revival in construction activities. As a ripple effect the prices at Ex-Work Nanjiang settled at USD 2029 per tonne in June.
During the second quarter of 2021, supply remained tight in the European region owing to the delay in resumption in BASF Ludwigshafen plant in Germany in the second half of the quarter. However, the influx of the volumes from US enhanced the supply outlook. Demand was on a downward trajectory amidst feeble offtakes from flexible foam industries due to the offseason period. Prices fluctuated in a stable to firm range amidst the balanced supply demand ratio in the second quarter of 2021.
For the Quarter Ending March 2021
TDI supplies remained tight during Q1 of 2021 as various plants reported maintenance outages during the H1 of the quarter. During mid-February, freeze weather conditions disrupted the production line in the US gulf region, which further resulted into surged spot prices of feedstock as well as TDI in the domestic market. Some plants located in Texas and Louisiana were affected by the winter storms. The demand surged for the downstream polyurethanes from the automotive sector which showed signs of rebounding. However, the hiked prices and supply disruptions inclined the offers especially destined to the Asian region.
The supplies were balanced in the APAC region, during the quarter, as the addition of new capacities in China inclined the production. However, most suppliers in the region were heard catering to the demand of feedstock Toluene from the western hemisphere for better netbacks in revenue. The demand from the APAC region surged throughout the quarter as the consumption rose amid improving automotive demand. The decline in imports of Toluene Diisocynate amid delayed deliveries from the US and unavailability of transportation freights, surged the CFR prices of Toluene Diisocynate in the Indian market, while maintaining an average of USD 1942/ton in Q1 of 2021.
During the Q1 of 2020, the supplies were tight in the European region, due to the imposition of lockdown, restricted mobility and economic activity which became restricted leading to the downfall in the regional consumption surged the demand regarding export purposes. The surging spot prices in feedstock Toluene, widen the arbitrage between US and Europe, followed by due to minimal transporting activities its consumption from automotive sector decline which further reduced the demand of TDI in domestic market.
For the Quarter Ending September 2020
After observing steep slump in its values in the previous quarter, Toluene Diisocyanate (TDI) fundamentals in the Asian market gradually improved by Q3 2020 against the backdrop of supply shortages from several western countries due to seasonal plant outages. Although TDI market sentiments in the Southeast Asian countries like India remained bearish as buyers restrained from indulging in new contract deals as they were expecting a further drop in prices. In India, TDI was traded at USD 1839 per MT in September, showcasing a drop by around 3.5 per cent from the previous quarter. To relieve the domestic production, the government of India announced anti-dumping inquest on TDI imports from China in late August. As major economies in Asia are continuously revising their market strategies to combat against the demand volatility, traders showcased optimism over improvement in its offtakes by the next quarter.
Supply fundamentals of Toluene Diisocyanate (TDI) remained mixed in the third quarter of 2020. Producers were heard operating at increased rate on pick up in demand from flexible foaming application amidst the resumption in market activities due to relaxations provided in lockdown restrictions. However, several maintenance turnarounds in the second half of the quarter caused a supply shortage in the market, thereby compelling the end use industries to shift to the imported product. Many factories that earlier maintained low inventories were seen restocking ahead of the anticipated rise in seasonal demand.
Ample stock of TDI in the US market against its slowed consumption from downstream industries continued to put forth downward pressure on its price fundamentals. In line with bearish demand outlook, BASF declared a force measure on TDI plant based in Louisiana. Although the situation relatively improved in comparison to the previous quarter with pickup in demand from bedding and furniture segments, it was not enough to revive the prolonged grim outlook of TDI in the regional market. Furthermore, demand for TDI from the automotive sector showed a substantial recovery but remained way below the pre-pandemic levels.