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 Q4 2017
Supply will likely remain tight in Q4 as the shortage of raw material carbon monoxide (CO) in South Korea is expected to persist until Q1 2018. While South Korean producer Kumho Mitsui Chemicals Inc (KMCI) is expected to start up its 100,000 tonne/year expansion line in December this year, it is unlikely to run at a high rate until the CO shortage in the country has been alleviated.
Demand is expected to increase in Q4 amid the traditional peak demand season in September and October every year, with the continued tight supply likely to result in prices in other Asian regions to rise to close the gap with firm China prices.
Supply for European crude methyl di-p-phenylene isocyanate (MDI) was described as low in 2017 following production issues in April and May. These availability difficulties were then extended into the third quarter mostly due to planned maintenance in the market. It is the end of these turnarounds that most participants expect will mark the beginning of increased supply for crude MDI. Therefore, by the end of the fourth quarter, lengthier availability is anticipated.
The start of the fourth quarter typically has higher demand in the European crude methyl di-p-phenylene isocyanate (MDI) market. However, by the end of the year consumption usually quietens down.
Supply of PMDI in Q4 is expected to remain fairly stable. A key Asian producer was heard to have delayed its maintenance plans from November but this could not be confirmed yet. Other producers are expected to experience stable to slower production due to prices and supply of raw materials. Capacity expansions are expected to be limited. Market players will be eyeing signs of Sadara's commercial activities in the Middle East.
Demand is expected to remain firm in the initial few weeks of Q4 but this could taper off toward the end of the year. The key factors will be the Asian market and domestic PMDI prices in China as well as economic growth rates in the GCC and the broader Middle East region.
MDI supply tightness is expected to remain in place into the fourth quarter, but may ease depending on how quickly plants around the world restart. In the US, Dow and Covestro both lifted the force majeures declared after Hurricane Harvey, although supply issues elsewhere will keep availability tight.
Demand for downstream polyurethane systems will remain healthy in the fourth quarter, although activity in the construction sector may slow with the onset of the winter. Prices may witness further increases as supply is expected to remain limited.
Updated to Q4 2017
Supply in Q4 is likely to remain largely stable with no major supply disruptions expected. A South Korean plant is will undergo scheduled maintenance in H2 October for two weeks.
Demand is expected to improve slightly from the previous quarter due to the traditional peak demand season every September and October. Downstream foam makers will likely ramp up their plant operating rates along with a retreat in other feedstock polyols prices.
European toluene di-isocyanate (TDI) supply is not expected to increase in the fourth quarter. This is due in part to unclear operating rates at BASF’s 300,000 tonne/year plant in Ludwigshafen. Earlier this year, the German producer revealed that the plant would not be fully repaired until 2018. Until then, participants do not expect supply in the TDI market to improve. In addition, Hungarian producer BorsodChem will be on strict allocation in October following a turnaround in the third quarter.
Typically, the European toluene di-isocyanate (TDI) market sees higher demand at the start of the fourth quarter. Order book volumes, however, generally decrease by the end of the year.
Supply is expected to remain stable through the final quarter of the year, although there could be some shortages in the second half of October due to a maintenance shutdown at a key Asian manufacturer. However, this could be countered by increased production levels at other manufacturers, to keep supply relatively constant.
Demand in the early weeks of Q4 is expected to remain strong, although persistently high toluene di-isocyanate (TDI) prices could continue to deter buyers. Demand however, is expected to wane towards the end of the year due to the year-end holiday season. Market players will be watching TDI prices in Asia for clues.
Global toluene di-isocyanate (TDI) supply will remain tight in the fourth quarter as BASF's new TDI plant in Ludwigshafen continues to run at reduced rates while it waits for a new reactor. Covestro's force majeure on TDI remains in place in the US. On the other hand, Sadara has started up its new TDI plant in Saudi Arabia and shipments to Asia are reported to have already been made.
Demand for downstream polyurethane (PU) systems is likely to remain healthy into the fourth quarter. Rebuilding efforts following Hurricanes Harvey and Irma could stimulate additional demand for PUs, which are used in a wide variety of applications in the automotive, home furnishings and construction sectors.
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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.