Europe Toluene Diisocyanate Market Faces Headwinds as Construction Sector Weakens

In the first half of October 2024, the Toluene Diisocyanate market showcased pessimistic sentiments in the European region. Buyers were cautiously making Toluene Diisocyanate purchases as the Consumer Price Index (CPI) for the Euro Area rose by 1.8% in September 2024, down from 2.2% in August, indicating an increase and reflecting an upward trend in consumer prices. The market players negatively revised their prices to improve offtakes as the available inventory levels were firm in the regional market.

The Toluene Diisocyanate orders were low from the buyers due to the sluggish consumption of materials in the construction sector. The construction activity declined across all monitored countries and sectors in Europe, with reduced employment and purchases. The latest construction index indicated a significant slump in eurozone construction by the end of Q3 2024, highlighted by a steep drop in new orders since May. Simultaneously, in September, Europe's Manufacturing Purchasing Manager's Index (PMI) declined again at the end of the third quarter of 2024, reaching its lowest level in nine months. This decrease indicates a significant and accelerated decline in the health of the euro area's goods-producing sector.

At the same time, the operating rates were moderate at Toluene Diisocyanate manufacturing units after the end of the regional summer holidays. The end of disputes in Libya and the resumed exports from the country improved the availability of upstream Toluene supplies amid increased refinery run rates. It negatively impacted the upstream cost support on the production costs of Toluene Diisocyanate. At the same time, the inventory levels rose in the regional market as European Exports declined in September 2024, and the sub-index reached its lowest level since late 2019. This sub-index has seen the largest decrease compared to the same time last year, falling significantly more than any other sub-index.  Meanwhile, Covestro, in Dormagen, Germany, with a Toluene Diisocyanate production capacity of 25000 TPM, went for planned Maintenance from 1st October to 15th October.

According to the ChemAnalyst data sources, Toluene Diisocyanate (T80) FD Hamburg witnessed USD 2430/MT at the end of the first half of October 2024, after a decrease of 1.6% during the period.

Anticipations are that the Toluene Diisocyanate market will continue to showcase bearish sentiments in the European region, and prices will decrease further during the first half of the final quarter of 2024. The demand for Toluene Diisocyanate might remain sluggish due to the increased use of bio-based materials in PU industries. The ample availability of Toluene Diisocyanate supplies in the market would negatively impact the product prices.