The global Isocyanates markets are covered weekly by ICIS in Asia, the Middle East, Europe and the US. All the reports have price assessments on methyl di-p-phenylene isocyanate (MDI) and toluene di-isocyanate (TDI) for spot business and, where applicable, contract or domestic activity.
The up-to-date market news and analysis is collated by our locally based reporters and includes regional activity, upstream and downstream movements, production schedules, graphs and, in some instances, historical data. This provides you with a valuable tool to base your commercial judgements on.
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Isocyanates: Market overview
Updated to Q2 2018
Supply of PMDI/MMDI is expected to increase in Q3 with the restart of Shanghai Lianheng Isocyanate Co (SLIC) – the pre-cursor unit of Shanghai BASF Polyurethane Co (SBPC) and Huntsman Polyurethanes Shanghai (HPS) – in late-June. Supply will be further boosted by the restart of Japan’s Tosoh Corp’s Nanyo plants in mid-June.
Demand for both PMDI and MMDI is expected to increase with the approach of the traditional peak demand season in August/September in the year. Buying interest will likely be boosted as buyers start to replenish stock at the more attractive prices after the recent downtrend in prices, especially for PMDI.
More product will be added to the Europe crude MDI market and tight pure grade supply after US seller Dow Chemicals’ Stade plant comes online. However, there is a MDI turnaround in China in July as well as planned maintenance at Hungarian seller Borsodchem’s Kazincbarcika facility that starts in the same month.
Typically consumption for Europe crude MDI increases in the summer. This is as activity in the downstream construction industry jumps in warmer weather. However, end users switched to alternative products in 2018 due to higher pricing in 2017 and it is not clear if these customers will return to crude MDI in the short-term future.
Supply could increase after the Eid ul-Fitr holidays and stronger demand is expected in Q3, which typically signals the start of the seasonal peak demand period. Producers have been hopeful that prices should hit a bottom soon and that improved demand would coincide with some ongoing maintenance shutdowns and spark a revival in price uptrends.
Demand in the GCC and the broader Middle East region typically increase during the strong season in Q3 with construction activity expected to increase, driving demand for rigid foam products. However, ample supply could limit upside potential, while current inventory levels were believed to be healthy and few were in urgent need for large volumes. Many buyers in the region are expected to eye price trends in Asia for clues.
US MDI supply is expected to continue to ease into the third quarter, with supply for polymeric MDI (PMDI) likely to further loosen while monomeric MDI (MMDI) supply may remain tight. US plants are running at healthy rates while Asian suppliers are likely to maintain higher allocations to the North American market.
MDI demand is expected to remain fairly stable into the third quarter as overall demand for polyurethane systems is anticipated to follow a steady trend. Demand from the construction sector is expected to remain healthy during the summer high season while demand from the automotive sector is likely to remain sluggish.
Updated to Q2 2018
Supply is set to increase in the third quarter as most northeast Asian plants have recovered full production following their turnarounds in the second quarter. More supply may also come from a recent start-up in Saudi Arabia, which has been shipping limited volumes to Asia since it came on stream in August last year.
Demand is expected to pick up with the onset of the traditional peak demand season every August/September, although it is unlikely to be too significant amid poor market sentiment. Downstream foam makers are expected to ramp up their plant production and re-stock on cargoes following the acceleration in TDI price declines since June.
German seller BASF’s TDI Ludwigshafen plant restart will bring downward pressure in Europe. After the facility was shut down in January TDI prices firmed. Once the unit comes online, a reversal of pressure is expected by participants. In late June, a spokesperson said BASF assumed the unit would resume production within the coming weeks.
After historically high pricing for European TDI in 2017, end users switched to alternative downstream applications such as spring mattresses. This dampened TDI demand to an extent in 2018. The downward price trend in June may bring back order book volumes if customers return as a result.
Supply is expected to increase in coming months Many buyers are also eyeing increased supply from Europe and the Middle East to further weigh on prices going forward.
TDI demand in the GCC and the broader Middle East region is about to enter a typically strong demand season in the third quarter. Many TDI buyers, however, were heard to still be holding out for further declines in prices despite inventories possibly running low
US TDI supply is expected to continue to lengthen during the third quarter as BASF is expected to restart its 300,000 tonnes/year TDI plant in Ludwigshafen, Germany early in the quarter. The plant had been running at reduced rates for the past year.
US TDI demand is anticipated to follow a steady trend over the third quarter. Mattress and furniture demand is likely to stabilise but may not recover to the levels seen in the prior year. Automotive demand is expected to remain slower compared to the prior year.
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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.