American PU Resin Market to Shows Bull Run February 2024 as Demand Conditions Improve

Prices of Polyurethane Resin (PU Resin), Rheology Modifier grade, were recorded to have increased in the first half of February 2024 due to increments in the prices of feedstock MDI (Methylene Diphenyl Diisocyanate) and TDI which has affected the production costs.

The US PU Resin market followed the trend of January 2024, which was driven by the low demand from the automotive sector as automotives sales plummeted by more than 25% during the same timeframe. However, regaining momentum in the demand from the automotive sector is expected in February 2024. Likewise, the demand of PU Resin for exports across the importing Mexican and Canadian markets also remained sluggish in January 2024 as demand from the automotive sector and construction was recorded to be low. Automotive sales across Canada and Mexico witnessed depreciations of approximately 6.5% and 22% respectively further reducing the demand for PU Resin. However, gradual increments in the sales in the importing markets are also anticipated in February 2024.

Across the United States, demand for PU Resin largely originated from the construction activities as the commercial and housebuilding activities notice positive movements, with further improvements anticipated in the Second half of February 2024. The improvements in the US construction sector were marked by an increase in the number of renovations across the hotel industry and a shortage in the number of existing houses across the US which compelled housebuilding activities to increase. The stabilization of mortgage rates, according to Freddie Mac, further cast a positive outlook on the prospective homebuyers, further providing support to the US PU Resin market. Current mortgage rates across the US were recorded to be stable at average of 6.6% and 5.8% for a 30 and 15 -year fixed term during the termination of first half of February 2024. In terms of manufacturing activities, delayed input deliveries and a reported relapse in supplier performance were said to have hindered production. Increased input prices were caused by higher transportation expenses throughout the month with anticipations of further increments in February 2024.

For the second half of February 2024, US PU Resin prices are anticipated to be driven by increasing prices of feedstocks MDI and TDI complemented by increments in the prices of upstream Cude Oil. Moreover, demand for PU Resin exports is also anticipated to improve as nearshoring activities continue to take full effected further complemented by increase in the number civil engineering activities which were funded by the Mexican government. This is expected to further provide support to the US PU Resin market.