US Toluene Diisocyanate prices declined amid increased inventories

The Toluene Diisocyanate price trend showcased a bearish movement at the beginning of Q3 of 2024, and producers decreased the quotations by almost 2% during the first half of July 2024. In the automobile sector, total sales reached 1,341,273 units in June, representing a 7.15% decrease compared to May and a 3.22% decline from June of the previous year. This downturn highlights ongoing challenges within the market, including shifting consumer demand and potential economic factors impacting purchasing decisions. Consequently, the consumption of Polyurethane foam remained sluggish in the Automotive sector, which decreased the orders for PU component Toluene Diisocyanate and raised inventory levels in the country. Meanwhile, the Federal Reserve kept its interest rate unchanged in June 2024.

On the contrary, the demand for Toluene Diisocyanate, a component of Polyurethane, remained consistent due to firm consumption of PU materials from downstream construction and manufacturing sectors. The construction sector continued to perform well. The construction sector continued to perform well. The US Census Bureau reported that construction spending in May 2024 was estimated at a seasonally adjusted annual rate of USD 2,139.8 billion, representing a slight 0.1% decline from April's revised estimate of USD 2,142.1 billion. It contributed to the firm consumption of polyurethane materials and its key component, TDI. Consequently, manufacturing rates were firm, and at the end of the second quarter, the US Manufacturing PMI rose from May, indicating improvement in manufacturing activities.

At the same time, the Toluene Diisocyanate supplies were sufficient to cater to the market demand, and the offtakes remained moderate from the market. At the same time, domestic inventory levels of Toluene Diisocyanate improved as export rates were low, and the US exports fell in June from the previous month. At the same time, production costs were low due to a decline in offtakes at the end of Q2 2024 and a reduction in upstream Crude Oil prices. However, cost support was firm from feedstock Toluene during the week due to increased consumption from downstream value chains. It raised the production costs of Toluene Diisocyanate.

Conclusively, according to the ChemAnalyst data sources, Toluene Diisocyanate (T80) FOB Texas quotations witnessed USD 2760/MT at the end of the first half of July 2024.

As per the estimation, the Toluene Diisocyanate prices might increase in the upcoming weeks in the North American region. The demand for Toluene Diisocyanate would increase from the Polyurethane segment as buyers may ramp up their purchases before the Hurricane season to avoid production delays in the downstream Polyurethane manufacturing units. Additionally, the production cost of Toluene Diisocyanate would increase due to the anticipated increase in feedstock Toluene prices.