Toluene Diisocyanate Price Trend and Forecast

Regional Price Overview

Get the latest insights on price movement and trend analysis of Toluene Diisocyanate in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

For the Second Quarter of 2022

Asia

Due to the lack of demand from polyurethane producers and the stalled home sector's shopping activity brought on by periodic lockdowns, China, the region's largest producer of TDI, saw prices decline steadily in the first half of the quarter.

Values began to rise in the second half of Q2 as a result of increased manufacturing and trading activity in the area following the port's quick reopening and ease of closure. Similar price reductions were seen in India and other Asian nations. Toluene diisocyanate price inched down by an average of 8% on a quarterly basis in June, settling at USD 2520/MT in China.

North America

Throughout the second quarter, TDI’s price declined steadily in the North American region. The price dropped during the first quarter of the year as a result of a dip in demand from both exporting and importing nations. With continuous material demand and steady offtakes,toluene diisocyanate price was fixed at 3120 USD/MT in June 2022, following a quarterly decrease of 4.7%.

Europe

Prices for TDI remained high in the European region, and they fluctuated continuously over the course of the quarter. Rates spiked at the start of the quarter as a result of regional energy supply difficulties and an increase in upstream activity. Cost pressure on upstream was caused by the price of natural gas.

TDI prices then started to drop in the middle of the quarter. Due to container limitations, material supplies were also impacted in the European region, but demand remained stable thanks to consistent market material offtakes. The price of Toluene Diisocyanate FD Hamburg assembled at 3603 EUR/MT in June 2022 after an average quarterly value increase of 11%.

Analyst Insight

According to Procurement Resource, the prices of Toluene Diisocyanate are expected to be moderate amid extreme vacillations across higher and lower prices. The lower feedstock prices and bearish market sentiments might see a decline in the prices. However, European imports might act as a saving grace for the Toluene Diisocyanate prices in the latter months of the second half of the year.

For the First Quarter of 2022

Asia

During the week ending March 4th, the Indian market saw a 2.24% increase in TDI prices week over week. Ex-Mumbai, the rates were estimated to be 23,6060 INR/MT.

Increasing demand from the downstream industry, as well as increased upstream expenses due to higher feedstock prices, were the main drivers of this price increase. Downstream demand for TDI was increasing in order to make polyurethane which is widely utilised in furniture, infrastructure, and the automotive industry.

For the Fourth Quarter of 2021

Asia

Due to the impact of logistical challenges and port congestion, as well as the low inventory of feedstock in Q4-2021, the proposed bids for TDI in the Asian market received additional cost assistance. The strong spot demand in China, along with a drop in TDI production due to the government's Dual Control Policy, caused market participants to be concerned about losing competitiveness.

Short-term stability was reflected in the form of a small respite with the decrease in feedstock prices with internationally recovering upstream inventories and underwhelmed demand in the automotive sector, but the general price trend remained buoyant with multiple gains, reaching 2417 USD/MT FOB Qingdao in December.

Due to increased festive season sales and limited imports from China and Europe, TDI prices in India soared at their highest level in October, indicating a surge in regional demand. The falling toluene feedstock futures, on the other hand, permitted downstream purchasers to accumulate inventories in November and December.

Europe

The European market's TDI supplies were extremely restricted due to a prolonged toluene scarcity and erratic imports. The fundamentals of demand soared to extremes that domestic inventories couldn't meet, resulting in multiple order cancellations. TDI prices were slightly lower in December due to a reduction in port mobility and a weakening feedstock market.

Nonetheless, regular offtakes in downstream industries kept the European TDI market under pressure. TDI prices in Germany dipped from record highs in December, ranging about 3310 USD/MT FD Hamburg.

North America

Due to limited supply of toluene feedstocks and TDI as a result of ongoing hurricane-related production outages in numerous refineries and downstream facilities in Louisiana, TDI prices in North America remained high in October and November. The unexpectedly high volume of inquiries from the downstream polyurethanes sector frightened the manufacturers, who were struggling to meet their contractual obligation.

Despite rising production output and upstream crude oil stockpiles in the second half of November, TDI prices remained stable due to strong demand from the end-user upholstery, construction, and paints & coatings sectors, leaving no opportunity for buyers to haggle.

For First, Second and Third Quarters of 2021

Asia

During the first quarter, the APAC region's supply was balanced, thanks to the installation of additional capacity in China, which pushed up production. However, most providers in the region were heard accommodating to the western hemisphere's demand for feedstock toluene in order to increase revenue netbacks.

Throughout the quarter, demand from the APAC region increased as consumption increased in tandem with rising automobile demand. Due to a drop in imports of TDI as a result of delayed deliveries from the United States and a lack of transportation freights, CFR prices in the Indian market soared in Q1 2021, while maintaining an average of 1942 USD/MT.

In the second quarter, the outlook in Asia Pacific deteriorated. Due to scheduled turnarounds in the second quarter, crackers in South Korea's Kumho Line 3 and Japan's Mitsui Chemicals plant were closed, limiting supplies in the Northeast Asian region. In China, the government slapped a consumption tax on a number of imported strong aromatics.

Due to container constraints and a challenging economic environment, the levy was followed by an increase in freight prices. Offtakes were limited as demand from the PU segment fell owing to off-season emotions, but the situation improved as construction activity picked up. TDI prices at Ex-Work Nanjiang stabilized at 2029 USD/MT in June as a result of the ripple effect.

In Q3 2021, the overall market for TDI in the Asia Pacific region was on the rise. Prices rose sharply in India during the first week of July, boosted by stable demand dynamics in the country and limited supply in the foreign market. During the quarter, CFR Kandla pricing increased, rising from 1984 USD/MT to 2181 USD/MT.

Due to the interruption caused by Hurricane Ida, BASF announced a temporary shutdown of its TDI production in Louisiana. Furthermore, due to a lack of feedstock, BASF Shanghai had to temporarily shut down its production in China. All of these disruptions contributed to a large increase in its price trend in the country.

Europe

During the first quarter of 2021, supplies in the European region were scarce owing to the implementation of a lockdown, which limited mobility and economic activity, resulting in a drop in regional consumption, which boosted demand for export purposes. The widening of the arbitrage between the US and Europe was exacerbated by rising spot costs in the feedstock toluene, which was followed by a drop in consumption from the automotive sector as a result of lower transportation activity, further reducing the demand in the domestic market.

Due to a delay in the resumption of production at BASF Ludwigshafen in Germany in the second quarter, supplies in the European region remained tight in this quarter. The surge of volumes from the United States, on the other hand, improved the supply outlook. Due to the offseason period, demand was on the decline, with feeble offtakes from flexible foam industries. In the second quarter of 2021, TDI prices fluctuated in a stable to firm range due to a balanced supply-demand ratio.

Due to disruptions in production and a paucity of raw materials in the European region, the TDI supply outlook remained unchanged in June. To finish maintenance, Covestro, a leading producer, was running its European operations at reduced pricing. BorsodChem was scheduled to begin planned maintenance at its MDI plant in Kazincbarcika, Hungary, in the third quarter. Demand remained strong during the quarter, according to several market participants, particularly in the downstream construction sector.

North America

The chemical’s supplies were tight in Q1 2021, with some plants reporting maintenance interruptions in the first half of the quarter. Freeze weather interrupted the production line in the Gulf of Mexico region of the United States in mid-February, resulting in a spike in feedstock spot costs and TDI on the domestic market.

The winter storms wreaked havoc on certain plants in Texas and Louisiana. The demand for downstream polyurethanes from the automobile sector soared, indicating that the industry is on the mend. However, rising prices and supply disruptions influenced bids, particularly those going for Asia.

Due to the rebuilding of industrial infrastructure in the United States Gulf Coast following the disastrous impact of the polar storm, supplies in the North American region strengthened in contrast to the previous quarter. Several production concerns at a major TDI facility erupted in the later part of the quarter, which hampered supply fundamentals marginally.

As the region experienced a seasonal increase in building & construction activities, demand from downstream paints and coatings, as well as various other end use segments, gradually improved. However, TDI prices began to rise in June, with FOB Texas prices reaching 3840 USD/MT.

The price increased significantly in the third quarter of 2021. The regular TDI market patterns in the region were disrupted by an unabated demand spike from downstream sectors combined with production interruptions.

Following Hurricane Ida, which prompted the entire closure of its Geismar, Louisiana factory, BASF, a major TDI producer, declared force majeure. As a result, the prices increased steadily for the most of the year. Demand from downstream industries such as paints and coatings, building and construction, and others remained strong.

For the Year 2020

Asia

Toluene Diisocyanate (TDI) dynamics in the Asian market steadily improved by Q3 2020, following a significant decline in its values in the previous quarter, despite supply shortages from numerous western countries due to seasonal plant outages. Although TDI market attitude in Southeast Asian countries such as India remained pessimistic, purchasers held off on signing new contract transactions because they expected prices to fall further.

In September, TDI was trading at 1839 USD/MT in India, down about 3.5% from the previous quarter. In late August, the Indian government announced an anti-dumping investigation on TDI imports from China in order to relieve domestic production.

Europe

Bulk toluene prices fell to 205-315 USD/MT on FOB Rotterdam basis, for the week ending Friday 27 March. The closure of BASF's smaller TDI plant in April, freed up toluene in the German market, resulting in a long supply of toluene in April.

North America

The combination of a large supply of the chemical in the US market and sluggish demand from downstream sectors continued to put downward pressure on its price prospects. BASF declared a coercive action on the chemical plant in Louisiana, citing a pessimistic demand outlook.

Although the situation improved slightly from the previous quarter due to increased demand from the bedding and furniture segments, it was not enough to reverse TDI's long-term negative view in the regional market.

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