For the Quarter Ending September 2024
North America
In Q3 2024, the Methylene Diphenyl Diisocyanate (MDI) price trend showcased bullish movement in the North American region. Prices witnessed a notable increase, driven by a combination of factors influencing the market dynamics. Factors such as steady demand, limited supplies, and cost support from feedstock Benzene contributed to the overall bullish market sentiment, highlighting a stable and robust pricing landscape for MDI in the region.
In the middle of the third quarter, MDI production rates were hampered because of the stressed availability of feedstocks in the region. The offtakes were moderate, and market players raised their quotations. The correlation in price changes demonstrated a positive sentiment, with a 4% increase noted between the first and second half of the quarter.
Towards the end of Q3, the impact of Hurricane Helene resulted in reduced manufacturing activities in the region and a reduction in domestic stockpiles amid affected supply chain activities. The market players raised their quotations, and the overall quarter-on-quarter percentage change of 7% further solidified this growth trajectory in Q3 2024. Conclusively, the quarter-ending price for MDI Polymeric Grade DEL Texas in the USA witnessed USD 2630/MT.
APAC
In Q3 2024, the Methylene Diphenyl Diisocyanate (MDI) market in the APAC region has been characterized by a fluctuating pricing environment. The quarter has witnessed significant influences from factors, like increased feedstock Benzene costs due to fluctuating crude oil prices, moderate demand from downstream industries, and improved manufacturing activities. The market's dynamics were further complicated by supply chain disruptions amid the impact of seasonal factors like monsoons and typhoons and geopolitical tensions affecting crude oil imports, leading to variable feedstock availability. During the mid-quarter, the looming concerns about a recession in the US affected the international crude oil market and refinery operation. It stressed the feedstock Benzene and Aniline supplies and MDI production rates. MDI prices fluctuated and decreased marginally towards the end of the quarter, and the price comparison between the first and second half of the quarter showed a negative change of 1%. Simultaneously, offtakes for moderately low from the PU segment during the period. Conclusively, from the previous quarter in 2024, prices negligibly fell by 1%, indicating a downward trend, and MDI Polymeric Grade FOB Qingdao prices in China settled at USD 1970/MT at the end of quarter 3 of 2024.
Europe
Like the North American region, the Methylene Diphenyl Diisocyanate (MDI) pricing in the European market has followed an upward trajectory throughout the third quarter of 2024. The market has been influenced by stable demand from downstream industries, particularly the Polyurethane segment, despite weak production rates, with a consistent decline in the Eurozone Manufacturing PMI Index. Supply-side dynamics also played a role, as supply availability was moderately low during summer holidays creating imbalanced demand-supply dynamics, yet demand failed to match this increase, as The Eurozone's construction sector continued its downturn, significantly impacting MDI consumption. Seasonality played a role as summer holidays resulted in labor shortages and reduced manufacturing rates, impacting supply chains. Additionally, concerns about a potential recession in the US affecting the international crude oil market and refinery operations have led to a shortage of feedstock supplies, impacting MDI production rates. Conclusively, the quarter concluded with an MDI Polymeric Grade FD Rotterdam price at USD 2470/MT in the Netherlands, after an overall 3% increase from the last quarter's prices, indicating a consistent upward trend.
For the Quarter Ending June 2024
North America
In Q2 2024, the Methylene Diphenyl Diisocyanate (MDI) price trend oscillated in North America. Initially, the price trend was firm, and prices rose due to increased production costs. As per EQT, the energy sector witnessed escalations in production costs due to geopolitical tensions and positive economic data. Meanwhile, the market showcased mixed demand for MDI from the Polyurethane segment.
During the mid-quarter, MDI prices declined, and several significant factors influenced this decline. Predominantly, the reduction in demand from the construction sector adversely impacted MDI prices. This sector faced reduced spending and higher borrowing costs, which led to lower offtakes of Polyurethane materials used in construction applications. Moreover, the automotive sector's sluggish consumption of Polyurethane products due to the increased supply of Chinese electric vehicles further exacerbated the declining demand for MDI. Additionally, the cost support from feedstock Benzene and Aniline fluctuated, impacting the production costs and subsequently influencing MDI pricing.
The U.S. market saw a -19% price change compared to the same quarter last year, indicating a significant decline. Prices also fell by 7% from the previous quarter in 2024, reinforcing the downward trend. A comparative analysis of the first and second halves of the quarter showed a -2% price change, emphasizing the ongoing decline. By the end of the quarter, MDI Polymeric Grade DEL Texas prices were at USD 2420/MT, reflecting the overall negative pricing environment. The price decrease was driven by persistent supply-demand imbalances and fluctuating feedstock costs, highlighting the market's deteriorating conditions in Q2 2024.
APAC
In Q2 2024, the Methylene Diphenyl Diisocyanate (MDI) market in the APAC region underwent notable changes due to several factors. Initially, MDI prices fell due to reduced purchasing activity, driven by subdued demand in the Polyurethane segment and lower trading volumes in the market. At the same time, cost support from feedstock Benzene decreased because of declining upstream Crude Oil prices and reduced consumption rates. Mid-quarter, prices increased as production rates were affected by limited availability of feedstock Aniline, due to previous production cuts and heightened demand from the pharmaceutical sector strained supply chains. Concurrently, demand for MDI surged as buyers stockpiled in anticipation of the monsoon season and increased production of Thermoplastic Polyurethane for PU sole footwear. This seasonal boost, combined with steady offtake from the Polyurethane industry, provided strong support for market prices. However, the construction sector’s increased demand for Polyurethane materials further propelled prices upward. Overall, MDI prices in China rose by 16% compared to the same quarter last year, reflecting significant year-over-year growth. Prices also climbed by 4% from the previous quarter in 2024, indicating a steady quarterly rise. The first and second halves of the quarter showed a 5% price differential, underscoring a consistent upward trend. By the end of the quarter, MDI Polymeric Grade FOB Qingdao was priced at USD 2015/MT, marking a considerable increase and reflecting a positive pricing environment.
Europe
In Q2 2024, the Methylene Diphenyl Diisocyanate (MDI) market in Europe saw a significant increase in pricing dynamics due to several key factors. A major influence was the limited supply of Aniline feedstock, caused by reduced production rates and heightened demand from the pharmaceutical sector. At the same time, feedstock Benzene prices rose because of increased demand from the downstream value chain and higher upstream Naphtha prices. This combination of constrained Aniline availability and rising Benzene costs significantly impacted MDI production expenses, driving up market prices. In Germany, these factors led to the most pronounced price fluctuations in the region. Seasonal increases in automotive production further boosted demand for Polyurethane, putting additional strain on supply chains already affected by geopolitical tensions and labor shortages. Despite these challenges, market sentiment remained relatively stable, with a 6% price increase from the previous quarter, signalling a recovery from a notable -27% change compared to the same quarter last year. Throughout the quarter, MDI prices exhibited a consistent upward trend, with a slight 1% rise between the first and second halves. These trends reflect ongoing demand and tight supply conditions. By the end of the quarter, MDI Polymeric Grade FD Hamburg prices were at USD 2500/MT, indicating a cautiously optimistic market environment. Overall, the pricing landscape was positive, driven by supply constraints and strong downstream demand, suggesting a cautiously bullish outlook for the European MDI market.
For the Quarter Ending March 2024
North America
The Methylene Diphenyl Diisocyanate (MDI) price trend showcased upward movement in the North American market during the first quarter of 2024. At the beginning of the quarter, the demand for MDI was firm from the Polyurethane segment as the furniture industry saw a surge in sales due to Presidents' Day deals and increased demand for painted furniture and cabinets. Simultaneously, the inquiries surged for energy-efficient products in the refrigeration industries.
During the mid-quarter, feedstock supplies were affected because of the low availability of upstream Crude Oil stocks in the global market due to production cuts by OPEC+ and rising anticipations of further Oil production cuts by OPEC+ after the cease-fire in the Israel-Hamas War. Simultaneously, the energy sector witnessed escalations in energy costs due to geopolitical tensions and positive economic data. The orders for Polyurethane components MDI rose in the Polyurethane segment amid a rise in demand from the construction sector for stocking purposes amid the anticipation of the revival of construction activities in the North American region with the arrival of spring.
Towards the end of the quarter, MDI prices continued to showcase bullish movement in the USA as orders were firm from the buyers due to the steady demand for Polyurethane components in the manufacturing and construction sectors. In the refrigerators and freezers (cold chain) sector, consumers complained of fridges dying young, which caused a surge in demand for MDI for repair and replacement objectives. At the end of the quarter, MDI Polymeric Grade FOB Louisiana in the USA witnessed USD 2480/MT.
APAC
In the first quarter of 2024, the Methylene Diphenyl Diisocyanate (MDI) price trend shifted movement in the APAC region. At the beginning of Q1, prices declined due to sluggish demand from PU foam manufacturers attributed to a slowdown in the furniture market amid the escalation in the cost of raw materials such as timber and plywood. However, demand improved for stocking purposes before the Lunar New Year holidays in major isocyanate producers in China. During the mid-quarter, South Korean exporters raised the feedstock Benzene costs due to an escalation in demand amid the increase in stock replenishment activities at manufacturing units after the Seollal festival in the country. At the same time, some of the manufacturing units in China went for maintenance shutdown during the Lunar New Year holidays from 2nd February 2024 till 18th February 2024. As a result, MDI prices escalated amid sluggish trading activities and firm demand from buyers like India due to consistent market offtakes during the wedding season and firm consumption of PU materials from the automotive and manufacturing sectors. However, operating rates and trading activities increased after the reopening of the Chinese market. Towards the quarter's end, the air cargo market witnessed increased demand for the third consecutive month in March, fuelled by the expansion of e-commerce and shipping disruptions in the Red Sea, impacting air freight rates and product supplies in the international market amidst moderate demand from buyers. At the end of the first quarter of 2024, MDI Polymeric Grade FOB Qingdao quotations in China settled at USD 1910/MT.
Europe
In the first quarter of 2024, the European Methylene Diphenyl Diisocyanate (MDI) market experienced trends akin to those observed in the North American region. Initially, supply chain delays and extended lead times hindered the availability of resources within the regional market. Demand for Polyurethane (PU) components, particularly MDI, surged amidst consistent consumption of Polyurethane foam and coatings by Automotive manufacturers due to increased orders for electric vehicles following price reductions by industry giants such as Tesla and BYD. Simultaneously, the production rates were affected by elevated energy costs and limited access to Benzene feedstock, exacerbated by supply chain disruptions stemming from heightened tensions in the Middle East. The situation was further complicated by a missile attack on an oil tanker off the coast of Yemen, leading to increased shipping traffic along alternative routes. During the mid-quarter, uncertainties regarding energy security in Europe arose, influenced by a pause in US LNG exports, impacting variable costs across industries. The automotive sector continued to witness heightened demand for lightweight PU materials derived from MDI, attributed to the growing production of electric vehicles. Towards the quarter's conclusion, regional manufacturing units grappled with disruptions to production schedules due to a shortage of skilled labor. It resulted in diminished output rates and escalated operational costs. Additionally, global air cargo demand experienced its third consecutive monthly increase in March, driven by the expanding e-commerce sector and disruptions in shipping routes, particularly in the Red Sea region, leading to fluctuations in air freight rates. Consequently, MDI prices trended upwards again by the quarter's end, with MDI Polymeric Grade FD Antwerp in Belgium assessed at USD 2460/MT.
For the Quarter Ending December 2023
North America
In the North American region, the Methylene Diphenyl Diisocyanate (MDI) experienced a bearish price trend during Q4 2023, with prices declining due to low demand and sluggish manufacturing activities in the Polyurethane segment. This price decrease is attributed to depressed consumption rates from end-user industries. Initially, the demand was for Polyurethane materials from the Automotive manufacturers due to a decline in manufacturing activities amid the United Auto Workers (UAW) strike.
At the same time, the cost support declined on feedstock Benzene at the beginning of the quarter amid weak demand and a decline in WTI Crude Oil prices due to stabilization in speculations around the supply chain disruptions in the Middle East amid conflict between Israel and Palestinian Islamist Group. During the mid-quarter, Methylene Diphenyl Diisocyanate inventories were adequately available in the market, and demand remained low from the Polyurethane segment more significantly after Black Friday sales and a decline in sales in the retail sector due to the depressed consumption rates from the end-user Automotive and manufacturing sectors. Meanwhile, the decrease in Cargo rates, caused by low water levels in the Panama Canal and Mississippi River, negatively impacted trading activities and raised the domestic inventory levels.
The price trend remained persistent towards the end of the quarter amid cautious buying activities from buyers. Conclusively, the low demand from the downstream industries, coupled with the introduction of bio-based Polyurethane, negatively impacted the petrochemical-based Polyurethane and Isocyanates market, and prices witnessed a decrease of almost 15% compared to the previous quarter. At the end of the final quarter of 2023, MDI Polymeric Grade FOB Louisiana in the USA hovered at USD 2083/MT.
Asia
In the Asia-Pacific region, the Methylene Diphenyl Diisocyanate (MDI) market situation was bearish due to low to moderate demand from the downstream industries and a decline in manufacturing sector activities, and prices decreased consistently throughout the final quarter of the year 2023. Initially, the feedstock Benzene prices fell due to a decline in upstream Crude Oil prices amid weakening US and European economies, which reduced the production costs, and production rates remained firm in the region. During the mid-quarter, the procurement activities were reduced from the regional buyers with the arrival of winter and Polyurethane components, and PU materials consumption rates remained sluggish from the end-user Automotive and manufacturing sectors. Towards the end of Q4, the destocking practices by the regional isocyanates producers and sluggish consumption rates from the buyers further tilted the prices in the negative direction. Meanwhile, the MDI consumption rates improved from the PU segment as the regional wood furniture market picked up the pace amid an increase in retail sector sales, and PU foam consumption rates improved in the manufacturing sector. However, at the end of the last quarter of 2023, feedstock availability was affected amid the rise in supply chain concerns through the Suez Canal after the Red Sea attacks in the Middle East region, and MDI Polymeric Grade FOB Qingdao in China hovered at USD 1810/MT.
Europe
Like the North American region, the Methylene Diphenyl Diisocyanate (MDI) market in Europe showcased bearish movement during the fourth quarter of 2023, with prices declining throughout the quarter. The market was primarily affected by low demand from the Polyurethane segment, as well as sluggish manufacturing activities and decreased offtakes from domestic buyers. Initially, adequate availability of supplies and the switching interest of downstream buyers towards bio-based Polyurethane materials negatively impacted the demand from the buyers. During the mid-quarter, MDI supply rates were firm in the regional market as shipping rates were consistent from the European hubs. The Eurozone Manufacturing Purchasing Manager's Index also dropped throughout the quarter, indicating a contraction in the manufacturing sector activities. Meanwhile, Covestro AG, in Brunsbüttel, Germany, with an MDI production capacity of 33333 TPM, went for Force Majeure in November 2023. Towards the end of the quarter, the Wood Furniture market in the European region was negatively impacted due to the bursting of a housing bubble, causing a decline in the demand for wood furniture and a decline for Polyurethane foam from the manufacturing sector. Consequently, the consumption of Polyurethane components diminished, and inventory levels remained firm in the market. Conclusively, the Methylene Diphenyl Diisocyanate witnessed a decrease of almost 17% in the region, and at the end of Q4, 2023, the MDI Polymeric Grade FD Antwerp quotations in Belgium accessed at USD 2162/MT.
