European Toluene Diisocyanate Prices Decline Amidst Sluggish PU Demand

In early June 2024, the price of Toluene Diisocyanate (TDI) began a downward trend, dropping by 1.1% due to subdued demand and stable supplies. The demand for TDI was sluggish from the downstream Polyurethane industries. The car sales in Germany fell by 2.7% in May 2024. Consequently, the consumption of Polyurethane foam fell from the Automotive sector, and orders diminished for PU component TDI.

The orders for TDI were sluggish from adhesive industries.  In the first quarter of 2024, the Tesa Business Segment witnessed an anticipated 5.4% year-on-year decline in organic sales, notably in the Electronics division across Asia and North America. However, the Automotive division experienced modest growth, attributed to the popularity of adhesive tape solutions for displays and smart surfaces. Despite market challenges, Tesa expresses confidence in the potential for significant improvement across all business divisions and their respective markets, especially in the H2 of the year. Simultaneously, the construction firms continued to grapple with a lack of new orders at the beginning of the second quarter, especially in housing activity, which sustained a sharp decline like the previous month. Simultaneously, the construction sector continued to encounter challenges, with a persistent decline in activity and employment due to ongoing weakness in demand. Furthermore, the inflation rate in the Euro Area rose by 2.6% in May 2024.

At the same time, the market experienced consistent availability of TDI stocks amid depressed offtakes from buyers and stable operating rates at manufacturing facilities. The manufacturing rates were steady amid the firm availability of feedstock Toluene supplies attributed to a decline in cost support from upstream Crude Oil towards the end of last month stemming from decreased consumption in downstream applications and heating purposes. It eased the production costs of TDI. Additionally, manufacturing activities improved slightly in the European region during May 2024, indicating an ease in the deterioration in manufacturing business conditions.

According to the ChemAnalyst data sources, the Toluene Diisocyanate (T80) FD Antwerp prices settled at USD 2670/MT at the end of the first week of June 2024.

The TDI prices are estimated to decline towards the end of the 2024 second quarter. The TDI consumption rates may decline further from the adhesive manufacturers during summer. At the same time, the production costs of TDI may decline due to the anticipated decrease in Toluene price towards the end of Q2 2024. Consequently, TDI market players might reduce their quotations to improve for destocking purposes.