Tokyo -- Mitsui Chemicals is "looking at a difficult market environment" and "continued harsh demand and supply conditions" in toluene diisocyanate (TDI) for the rest of 2015, the firm said in a conference with analysts in Japan.
The firm said "conditions in the TDI market declined in the final quarter of 2014." Falling raw material prices were outstripped by falling prices for TDI, explained Osamu Yoshida, director, corporate communications division.
Yoshida added: "The company booked an inventory valuation loss on lower-cost or market-value basis at the end of Q4 2014 while experiencing a further deterioration in earnings."
Looking toward the rest of the year, Yoshida said that the firm has "factored in an upswing in sales of coating and engineering materials focusing mainly on XDI following an increase in production at our Omuta Works."
The firm expects an improvement in the second half of 2015 because of the end of annual maintenance, which occurs in the first half of the year. This has seen TDI plant operating rates of around 50% in the first half. This is expected to rise to 100% in the second half, he said.
Mitsui added that it expects the weaker yen to benefit the bottom line in 2015 compared to 2014 but this will be tempered as "improvements in the terms of trade will narrow compared with financial year 2014 as market conditions for TDI are likely to deteriorate."