In December 2024, the Toluene Diisocyanate (TDI) market showcased bearish sentiments, and market players reduced their quotations by almost 2%. TDI production in the US remained stable in November 2024, supported by steady feedstock availability, though a decline in Toluene prices and higher fuel costs impacted overall production costs. However, demand for TDI stayed strong, driven by increased procurement in anticipation of the winter season and ongoing growth in the construction and automotive sectors.

TDI production rates in the US remained intermediate in November 2024, supported by consistent feedstock availability. However, a decline in Toluene prices, driven by low demand and reduced material purchases from downstream industries, eased the cost support from feedstocks. This drop in feedstock prices negatively impacted the overall production costs for TDI, as weakening demand from the aromatics sector exerted downward pressure on costs. Despite this, higher fuel prices contributed to an increase in production costs during the month. U.S. export prices for TDI remained stable in November, following a 1.0% increase in the previous month.

At the same time, demand for TDI, a key component in Polyurethane (PU) production, remained strong as buyers increased procurement in anticipation of the peak winter season. This steady demand is supported by ongoing growth in the construction and automotive sectors, which continue to drive the need for PU materials. In the construction sector, employment growth showed modest gains in November 2024, with non-residential construction leading the way with a 3.3% year-over-year increase. This trend supports sustained demand for PU materials, particularly in non-residential applications such as insulation and coatings. However, high interest rates and ongoing economic uncertainty may present challenges to further expansion. On the other hand, the automotive sector continues to experience strong growth, with a 9.8% increase in vehicle sales year-over-year, indicating robust demand for PU materials in sealing, insulation, and coatings. This recovery in the automotive market bolsters the need for lightweight and durable polyurethane components. As both sectors adapt to evolving market conditions, TDI consumption in PU production is expected to rise, with the automotive industry likely driving stronger demand in the short term.

As per the estimation, Toluene Diisocyanate (TDI) prices in the North American market are expected to rise with the improvement in demand from buyers. However, production may face slowdowns due to operational challenges during the peak winter period, with supply chain disruptions potentially further impacting market supply rates. Demand is anticipated to strengthen in mid-Q1, as the Chinese market will remain closed during the Lunar New Year holidays, creating a temporary shift in purchasing activity. Production costs are likely to remain firm, driven by an expected increase in upstream crude oil prices during winter. Overall, supply availability may remain limited in the market, tightening the TDI supply further.