MDI North America
MDI supply has improved but levels still remain short. Demand has entered its off season and is not expected to improve in Q4. The view on supply is mixed, some MDI buyers said they could not get MDI, whilst others said there was enough MDI if you paid the high price being asked. Demand has been steady but is expected to soften for the rest of the year. Construction markets usually slowdown in Q4 and statistics show the housing sector softened in September.
MDI Europe
The MDI market weakened further in October and attempts to increase prices were rejected. Demand is not expected to improve for the rest of 2024 and movement in prices is based on supply. Demand remains weak from most sectors and December is expected to be softer than November and Q1 2025 could also see further weakness. The construction sector is the only market that has been stable, but the market has started to slow down for the winter months. European supply continues to be disrupted due to turnaround and lower operating rates at some MDI plants.
MDI China
Operation rates of MDI units averaged around 65-70% in October. MDI supply was restricted due to inconsistent production from manufacturers in northern China, which further tightened stock availability. Reduced demand for crude MDI, as downstream production transitioned out of the traditional peak season, partially offset these supply constraints. Nevertheless, MDI prices increased throughout October.
TDI North America
The TDI market is reported to be balanced. Demand is steady and supply is enough to meet current levels of demand. TDI supply has been long for most of the year and buyers had no issues in securing TDI given the demand levels. One producer is reported to have a TDI turnaround in the US in Q4 but this has not been confirmed. A market participant said there are concerns that supply will tighten in Q4 and prices could firm, but this has not been the response from most market participants. Demand for furniture and bedding is reported to be stable. Demand from the automotive markets was stable in September but is reported to have declined for October.
TDI Europe
TDI prices have stabilised in Europe after firming in previous months. Supply is still disrupted but low demand prevented prices from going up. Issues with imports has also been a problem in Europe where delays have taken place and freight costs reached high levels. Freight rates are now declining at fast rates and will lead to more TDI arriving in Europe, adding negative pressure on domestic prices. Demand is reported to be weak once again and there is no evidence of any positive change in the short term. The automotive sector is a concern, particularly in Germany after Volkswagen announced they will be closing at least three plants in the country, cut pay by 10% and cut thousands of jobs.
TDI China
The Chinese market stabilised in October. In October, upstream TDI suppliers implemented a supply restriction strategy aimed at price increases, resulting in limited availability of spot TDI. Consequently, TDI prices experienced a modest uptick during the month. However, due to minimal growth in downstream orders, overall TDI prices remained stable. Two TDI suppliers had resumed production, alleviating the tight spot supply and contributing to a slight decline in TDI prices towards the end of the month.
Polyether Polyols North America
The polyether polyol market firmed in the US due to supply issues upstream. On top of supply tightness upstream, feedstock propylene is still at a high level even though prices declined significantly over the last two months. This has led to higher polyether polyols prices. Demand into construction is steady. The auto sector is expected to remain stable for the rest of the year. Supply is reported to be enough to meet current demand but at higher prices.
Polyether Polyols Europe
The European polyether polyols market is reported to have weakened in November. Demand is low and supply is readily available. Demand is weak from most downstream sectors. The automotive sector is weak and is not expected to improve. The comfort and bedding market is also not seeing high demand levels. The polyether polyols market is not expected to improve for the rest of 2024 and one market participant said they are “expecting Q1 2025 sales to be around 20% lower than Q1 2024.”In terms of supply, feedstock PO availability in Europe has been low but this has not had an impact on polyether polyols.
Polyether Polyols China
In China, downstream demand for polyether polyol remained subdued, with no significant boost. Supply fluctuations at some northern production units caused a temporary shortage, leading to a modest price increase for flexible polyether polyol mid-month. Overall, prices for polyether polyol moved in line with PO price fluctuations. On the demand side, the continued sluggishness in the real estate market has kept demand for upholstered furniture low, leading to weak sales for flexible foam polyol. Major buyers have largely maintained a cautious, wait-and-see approach, limiting purchases to essential needs only.
Regina Sousa is a senior consultant at TecnonOrbiChem
