US Toluene Diisocyanate prices decline amid weak demand from Polyurethane segment

In October 2024, the price trend for Toluene Diisocyanate in the North American region showed a bearish movement, driven by reduced demand for isocyanates within the downstream Polyurethane sector. Toluene Diisocyanate, a component material used in Polyurethane production, experienced sluggish demand from Polyurethane foam manufacturers, primarily due to weaker consumption in the furniture industry. High inventory levels in the furniture sector were a key factor, as spending at furniture stores dropped by 1.4% in September 2024, partly due to rising furniture prices. During the same period, the construction sector showed stable Polyurethane consumption, particularly for applications such as adhesives, coatings, and pipes, supported by existing stock levels. The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) for adhesives and sealants remained unchanged in October from the previous month.

At the same time, Toluene Diisocyanate inventories remained relatively firm in the North American market, despite a decrease in exports caused by supply chain disruptions, including hurricanes that impacted logistics. Additionally, buyers were cautious in their Toluene Diisocyanate purchases concerns over inflationary pressures, and there was an uptick in the Consumer Price Index (CPI) for October 2024.

Meanwhile, crude oil prices saw an increase at the start of October, fuelled by market speculations regarding potential supply disruptions from the Middle East due to rising tensions between Iran and Israel. These developments impacted Toluene production, a key feedstock for Toluene Diisocyanate. Coupled with ongoing hurricane disruptions, the availability of Toluene for Toluene Diisocyanate production was constrained, further hampering production rates in North America.

At the same time, the performance of the U.S. manufacturing sector declined again in October, indicating a slowdown in manufacturing activity including for Toluene Diisocyanate. However, in the latter half of the month, Toluene Diisocyanate production and supply conditions improved as feedstock availability increased. According to ChemAnalyst data, Toluene Diisocyanate (T80) FOB Texas prices stood at USD 2,688/MT at the end of October 2024, marking a 3.1% decrease from the previous month.

As per the ChemAnalyst estimation, Toluene Diisocyanate prices in the North American region are expected to decline in November 2024. This price decrease would primarily be due to an oversupply of Toluene Diisocyanate, following previous reductions in exports due to supply chain disruptions caused by hurricanes. Additionally, the demand for Toluene Diisocyanate might remain subdued from the Polyurethane segment due to the anticipated decline in consumption of Polyurethane from construction materials manufacturers as construction activities usually decline during winters.