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
In the US, for the first quarter of 2014, demand for toluene di-isocyanate (TDI) and methyl di-p-phenylene isocyanate (MDI) is expected to grow at a moderate rate, consistent with a mature US polyurethanes (PU) market. Participants are in the initial stages of discussions over an announced 10 cent/lb price increase for TDI, driven by increasing costs of upstream toluene, according to sources.
Participants expect that TDI demand in the US automotive sector will remain relatively healthy, while business activity continues to improve in the furniture, bedding and construction segments as the US economy gradually recovers. A proposed 3 cents/lb price hike for MDI remains under discussion, but it is too early to determine the outcome of the initiative. Buyer commentary suggests that the proposed hike has not garnered sufficient strength from the market to sustain full implementation, amid slack support from slowing construction activity during the winter.
In Europe, for MDI and TDI, sellers are looking to increase prices in January/the first quarter for margin reasons as upstream costs have increased in December and January and have not yet been passed on.
MDI buyers, however, will resist any upward price movement in the first quarter as demand for crude MDI from the main downstream construction sector remains in low season. For TDI, price developments will strongly depend on how supply and demand pans out. Players will be focussing on the new TDI capacity from Bayer MaterialScience and BASF which is expected to come on stream during 2014. While offtake from the main downstream bedding and furniture sectors is seasonally good in the first quarter, a lot will depend on how consumer confidence and spending play out.
In Asia, overall demand-supply fundamentals for MDI and TDI could be balanced in the early part of the first quarter, as demand is expected to flatten ahead of the Lunar New Year holiday, while sellers are expected to be under minimal inventory pressure following turnarounds/outage in a few northeast Asian plants during December to early-January, according to market sources. Market players say that demand typically starts to pick up gradually after the Lunar New Year holiday as production resumes in downstream industries, such as furniture, mattress, automobile seating, freezers and refrigerators.
Updated to mid-Jan 2014
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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.