MDI North America
The MDI market has not seen much change Q4 and prices have stabilised. There was a push to raise prices for September and some producers sent letters to buyers asking for increase, but this was resisted and prices softened. On the demand side, levels continue to be low and any pickup in demand depends on inventory levels and how much destocking takes place between now and Q1 2024.
The European MDI market saw some improvement towards the end of Q3 but was not enough to push prices up. Even though demand improved, market participants say levels were not high enough to warrant price increases and buyers resisted any attempt to push prices up. European supply continues to be disrupted as some producers are still running plants at lower levels. Imports from China are still arriving at competitive prices. Even though supply is disrupted, there is enough availability in the European market.
Chinese supply levels were reduced in September but has recovered. The maintenance of Wanhua‘s plant in Yantai lasted until 25 September. Other plants operated normally, with the average operational rates up to around 70%. Therefore, there was an expectation of increased supply in the market moving forward. In the aspect of downstream demand, the effects of national economic policy gradually emerged, leading to the continued recovery of operations in August and September. Most economic indicators have marginally improved, and domestic demand is seeing a gradual revival but MDI demand stills remained weak.
TDI North America
The North American TDI market continues to be described as quiet and is unlikely to see much change as the festive season approaches. Demand is mixed depending on the sector. Comfort and bedding is still quiet, and there could be some buying before Christmas but levels are not expected to increase significantly. The automotive sector remains strong. Supply is enough to meet current demand levels.
TDI supply in Europe is still disrupted and having lower production rates for most of 2023 has finally caught up with the market. Demand has been improving since September but still remains at low levels. Lower supply levels and higher demand meant there was a huge pressure from producers to increase prices in October. There could be a push to increase prices once again as supply is still disrupted and there could be a pickup in demand from the comfort sector and luxury furniture before the festive period.
Chinese operating rates remained low as Q4 approached and several plants remain offline. Downstream, it was observed that demand fell short of expectations. Although October is traditionally considered as a peak season for terminal industries, there was no significant growth in orders due to the sluggish economic conditions. In September, China’s TDI export volume decreased by 6.64% compared to August, with the main export destination being Vietnam and Indonesia.
Polyether polyols North America
The supply/demand picture for polyether polyols remains balanced. Demand has been stable to soft again in Q4, as it has been for much of the year so far. Demand for rigid polyether polyols into construction and appliances is good. Demand into auto applications is said to be steady. Demand for flexible polyether polyols into furniture and bedding is depressed according to a market participant.
Polyether polyols Europe
Polyether polyol markets experienced some positive changes from September into October as demand picked up to some extent. Demand usually increases in September as plants come back online after the summer closures while construction also saw better demand levels. Demand into comfort is weak and the automotive industries are doing ok. Given the supply and demand dynamics, producers are reported to have pushed for price increases and were successful.
Polyether polyols China
In China, there has been no change in downstream orders because of pessimistic macroeconomic views. With the advent of the National Day in China, there was limited downstream procurement, primarily for pre-holiday inventory build up. This absence of robust purchasing intent provided no positive support for the flexible foam polyol market which remains weak.
Regina Sousa is a senior consultant at Tecnon OrbiChem specialising in PU and intermediates