Isocyanates Prices, markets & analysis
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Isocyanate overview Transcript
Toluene diisocyanate or TDI and methylene di-p-phenylene isocyate or MDI are the most common types of aromatic isocyanates. They are used mainly in the production of flexible and rigid polyurethane or PU foams.
Minor applications include coatings and adhesives. Most TDI output goes into the furniture and automotive sectors, and most MDI into construction. So demand for isocyanates is closely linked with economic performances.
Other factors which impact the price of isocyanates are the supply and feedstock values such as benzene and toluene which are in turn heavily dependent on crude futures pricing. China is the main user of TDI and MDI in Asia.
It has the largest manufacturing base due to a continuous increase in local demand and is the leading exporter for finished goods. Both TDI and MDI are greatly dependent on spot trades which are primarily driven by traders and producers.
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Isocyanates: Market overview
Updated to Q4 2014
In Europe, some methyl di-p-phenylene isocyanate (MDI) sellers said they are hopeful of price rises for the fourth quarter, citing the need to achieve re-investment levels and what they consider to be solid demand. One seller said it also needs to re-allocate some of its volumes from Europe to the US because of production problems there.
European toluene di-isocyanate (TDI) sellers are hopeful that the upward price momentum for TDI is likely to continue into October, saying margin recovery and some seasonal pick-up in demand are the main drivers. Buyers are determined to resist any price rises in October, as they said they have not managed to pass on previous increments and that demand from the main downstream bedding and furniture sectors is fragile for economic reasons.
In the US, price increases were separately announced for MDI at 6 cents/lb or 8 cents/lb on 1 August or 15 August, depending on the producer. If partially or fully successful, the increases are not expected to be implemented before October, as most contracts are on a quarterly basis. The market is firm on the back of constrained cargo availability after plant turnarounds and difficult restarts, with two declarations of force majeure on MDI in the US. Even as production is restored, MDI supply will remain tight in the US into the fourth quarter while backlogged orders are shipped and inventories are rebuilt.
TDI prices are projected to remain steady in the US, with no pricing initiatives heard at end-September for the fourth quarter, amid healthy demand on the back of the gradual housing recovery. Automotive business stays strong, while the bedding and furniture sectors are also active. No TDI production problems are noted in the US, while TDI supply from US domestic producers and moderate volumes of imports are gauged as adequate.
In Asia, the MDI market may see increased supply, with a new plant in China ramping up production during the fourth quarter, market players said. The supply may be somewhat offset by a turnaround being planned at a plant in China for close to two months, they added.
In the Asian TDI market, participants said they are waiting to see whether demand will recover as it traditionally did in previous years to alleviate the long supply. According to market sources, the oversupply conditions may exacerbate if a northeast Asian TDI plant starts up its second unit from October as scheduled.
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MDI: Pure methyl diphenyl diisocyanate (MDI) occurs as white to pale yellow crystals or flakes with a slightly musty odour. It is soluble in acetone, benzene, kerosene and nitrobenzene. It reacts readily with water to form insoluble polyureas and may polymerise under the influence of temperatures above 204oC.
MDI is made available both in pure form and as a mixture of MDI, the dimer and trimer. Mixed MDIs is referred to as polymeric isocyanates or PMDI.
MDI is used mainly in polyurethane (PU) foams. Rigid foams are mostly used in construction, refrigeration, packaging and insulation. Flexible foams are used in furniture, bedding and transportation. MDI is also used to make binders, elastomers, adhesives, sealants and coatings.
TDI: The main outlet for toluene diisocyanate (TDI) is in the manufacture of polyurethane (PU) flexible foams used in upholstery, mattresses and automotive seats. This is achieved by reacting the TDI with a polyol to produce the foam. Smaller uses for TDI include polyurethane elastomers and coatings.
TDI occurs as colourless to pale yellow liquid or crystals with a pungent odour. All isocyanates are hazardous and must be handled with care. Skin contact must be avoided, as redness, blistering and possible sensitisation can result.