Chlorine value chain: Isocyanates

DERIVATIVE 29%

■ 80% of methyl di-p-phenylene isocyanate (MDI) is used in polyurethane (PU) foams. Toluene di-isocyanate (TDI) is used in flexible PU foam, which has outlets in upholstery, mattresses and automotive

■ Bayer and BASF’s new Europe TDI capacity may impact pricing in a well-supplied market, particularly if demand does not pick up

■ Construction, housing, and automotive sectors drive demand for isocyanates and are seasonal with a summer peak

■ US is a mature market with moderate PU demand growth

■ Asia MDI prices may have bottomed, supported by the rebound in feedstock benzene prices

■ In China, MDI supply could increase in Q2 with the start-up of a 400,000 tonne/year plant

■ TDI spot import price in Asia may have room to fall further amid longish market supply, which coincides with the traditional lull in demand in Q2 every year after the Lunar New Year holidays