European Hexamethylene Diisocyanate Prices Decrease Due to Sluggish Offtakes

In Dec 2023, the regional producers decreased their Hexamethylene Diisocyanate quotations in the European region slightly by 1.3%. The Hexamethylene Diisocyanate supply rates remained stable in the market. Meanwhile, the market did not showcase any significant improvement in inquiries amid the ongoing economic slowdown in the region, and consumption rates remained moderately low in the Polyurethane segment.

Sources say that the Wood Furniture market in the European region was negatively impacted due to the bursting of a housing bubble, causing a decline in the demand for wood furniture. Consequently, the orders declined for Polyurethane foam from the manufacturing sector negatively impacted Hexamethylene Diisocyanate consumption rates during the month. On the contrary, the demand for Polyurethane slightly picked up the pace in the Automotive industries after Tesla’s announcement that the company is going to compensate for the withdrawn subsidies by the European Government on EV vehicles.

As per the sources, in December 2023, the Eurozone's manufacturing Purchasing Manager's Index decreased again and remained below 50 due to the decline in new orders and buying activities from the buyers, indicating a subsequent reduction in output rates and contraction in the manufacturing sector activities. Meanwhile, the previous availability of Hexamethylene Diisocyanate stocks was adequate in the regional market. Meanwhile the trading activities remained low due to affected shipping activities because of low water levels of the Rhine River.

Furthermore, on the contrary, the upstream cost support on Hexamethylene Diisocyanate inclined from the upstream Butadiene amid the fluctuation in upstream Brent Crude Oil prices and rising supply chain concerns through Suez Canal after the Red Sea attacks in the Middle East region.

Last month, the Hexamethylene Diisocyanate production rates were moderate amid improved feedstock availability after the resumed refinery operations in the North American region. At that time, supply rates were consistent in the market as shipping rates were firm from the European hubs amid anticipated improvement in demand from the Polyurethane industries. However, Hexamethylene Diisocyanate offtakes remained low, and the procurement activities remained sluggish during winter from the buyers. It raised the market inventory levels.

According to the ChemAnalyst data sources, the Hexamethylene Diisocyanate FOB Hamburg prices hovered at USD 4690/MT in Germany at the end of 2023.

As per the Covestro, a key Isocyanates and PU materials producer in Europe, the attack in the middle eastern region is not affecting the product supply rates in the European market. Hence, the Hexamethylene Diisocyanate prices will decrease further as the offtakes are sluggish and supply rates is firm in the European market.