The Toluene Diisocyanate (TDI) prices elevated by almost 1.2% in the European region during April 2024 as the availability of TDI stocks was average in the market amid the affliction in the production rates. The industries were facing the energy crisis amid weak LNG exports from US exporters. The increase in the electricity costs in the region raised the variable production costs. At the same time, the decline in skilled foreign labor due to rising racial tensions in the country likely impacted operating rates at manufacturing units. Many leading companies in Germany and the Netherlands have voiced worries about encountering recruitment difficulties due to prevailing anti-immigrant attitudes. Some employers have publicly stated that they are witnessing employee turnover directly associated with this sentiment. A lack of skilled workforce has resulted in disruptions to production timelines, potentially causing decreased output and heightened expenses.

In the second half of the month, the TDI price trend inclined again as regional suppliers raised their quotations by 0.8% amid heightened cost support on production costs and moderate demand sentiments from downstream industries. The TDI key feedstock, Toluene prices increased amid volatility in the market and tight supplies due to an increase in upstream Brent Crude Oil prices amid speculations around Geopolitical tensions between Israel and Iran. An Islamic Republic diplomatic facility in Damascus, Syria, was targeted by a missile strike, leading to the fatalities of seven Iranian military personnel. However, despite this incident, futures have seen a slight decrease this week, influenced by the effects of inflation figures and US crude oil inventory levels on the market. Israel has issued a cautionary message to Iran, signaling its readiness to respond if Tehran were to instigate an assault on Israel.

At the same time, the orders for TDI were moderate from the downstream Polyurethane segment amid average demand for Polyurethane products from the Automotive and manufacturing sectors amidst cautious buying activities by end buyers in the retail sector amid increasing inflation and living expenses in the region. Simultaneously, Tesla has initiated the production of right-hand drive vehicles in Germany to meet the needs of Indian consumers. This move has subsequently increased car manufacturing and stimulated demand for Polyurethane components, essential in the production of automotive parts.

Conclusively, at the end of April 2024, the TDI Toluene Diisocyanate (T80) FD Hamburg quotations were witnessed at USD 2630/MT.

As per the estimation, the TDI prices will remain firm in the European market as demand for TDI may increase from buyers during Q2 of 2024. The TDI offtakes may increase from the Polyurethane segment due to the expected rise in demand for end products in the construction sector. However, the TDI supply rates may remain low in the market due to a decline in operating rates at manufacturing units because of labor shortages.