For the Quarter Ending September 2024
North America
In Q3 2024, the Polyurethane (PU) Resin market in North America experienced rising prices, with a notable 2% increase from the previous quarter. The USA saw the most significant changes, primarily due to supply constraints related to feedstock MDI and TDI. Logistical challenges, including weather-related disruptions, contributed to higher transportation costs, further influencing pricing.
Although no plant shutdowns were reported, expectations of reduced PU Resin production persisted, especially following disruptions caused by Hurricane Francine. Delivery lead times also increased due to ongoing logistical challenges. Purchasing activity slowed, marking the sharpest decline of the year-to-date, as firms worked to reduce inventories in response to falling new orders. This resulted in a sixth consecutive monthly drop in input stocks, partly driven by efforts to improve cash flow amid sluggish demand. Demand in the construction sector remained moderate, affected by fluctuations in residential and private spending. Overall, pricing showed a steady increase throughout the quarter, with a 5% difference between the first and second halves.
The quarter-ending price for Polyurethane Resin Rheology Modifier in the USA was USD 1,895/MT FOB Houston, reflecting a consistent upward trend. Market conditions indicated a positive sentiment, suggesting a bullish outlook.
Europe
In Q3 2024, the European Polyurethane (PU) Resin market experienced fluctuations, with little improvement during the summer holiday season and the subsequent post-holiday period. Most suppliers adopted a cautious approach, refraining from active bidding in the market. Smaller producers faced intense price competition, prompting some to reduce production or even consider plant closures. Despite these challenges, MDI prices remained stable. The summer holidays further constrained production activities, resulting in minimal movement in the PU resin market. Most activity centred around restocking in anticipation of future demand, although this demand has yet to materialize. Dow's MDI plants in Europe continued to prioritize allocations for their North American facility, which was affected by a hurricane in July. Additionally, Covestro's MDI plant in Europe may face maintenance issues in September or October, coinciding with the holiday season. Some smaller plants have been revising contracts due to a lack of robust activity in the construction sector. As lead times for delivery of construction inputs continue to shorten, prices are expected to decline, especially with current stocks remaining high in warehouses. In Germany, the market saw the most significant price changes in the region, driven by deterioration of economic conditions and manufacturing sector performance. While the overall European market experienced a 5% price decrease compared to the same quarter last year, Germany recorded a smaller decline of 3%. A 1% price increase between the first and second halves of the quarter further highlights a strengthening pricing environment. The quarter-ending price for Polyurethane Resin flexible foam in Hamburg was USD 2,582/MT, reflecting the upward trend observed throughout Q3 2024.
APAC
In Q3 2024, the Polyurethane (PU) Resin market in the Asia-Pacific (APAC) region demonstrated stability, primarily due to consistent demand from downstream industries, especially construction and manufacturing. Seasonal fluctuations and logistical challenges, including weather disruptions and port congestion, contributed to maintaining stable prices. Supplies were moderate, as Mitsui Chemicals reduced the run rates at its TDI manufacturing plant in Omuta, with a capacity of 120,000 MT/year, since June 2024. This reduction led to lower TDI production in Japan, which in turn affected PU Resin production, resulting in moderate supply levels in the Japanese market. With most suppliers reporting sufficient inventories, there was little incentive to procure additional supplies, and trade discuss\ions remained limited due to unfavourable export conditions. Some cargoes were sent to China, where the National Holiday prompted a slight increase in procurement activity. In the domestic market, demand for PU resin was moderate, significantly impacted by Japan's housing sector, which experienced a 5.1% year-on-year decline in housing starts for the fourth consecutive month in August. This downturn reduced demand from the paints and coatings industries, with contractions observed across all housing categories. In Japan, the market saw a notable 17% decrease in prices compared to the same quarter last year and a 4% decrease from the previous quarter in 2024. Despite these fluctuations, the overall pricing trend remained stable, with no change between the first and second halves of the quarter. The quarter-ending price for flexible Polyurethane foam in Tokyo was USD 4,390/MT, reflecting a consistent pricing environment throughout Q3 2024.
For the Quarter Ending June 2024
North America
In the second quarter of 2024, the Polyurethane (PU) Resin market in North America underwent a notable decline in prices, influenced by several critical factors that shaped a challenging landscape. A significant driver of this downturn was the decrease in feedstock costs, particularly for MDI (Methylene Diphenyl Diisocyanate) and TDI (Toluene Diisocyanate), which are essential raw materials for PU Resin production. These lower input costs led to reduced production expenses, contributing significantly to the overall depreciation in PU Resin prices. The market's bearish sentiment was further compounded by subdued demand from key downstream sectors, notably automotive and construction. The sluggish recovery in the construction industry, coupled with minimal improvements in automotive sales, restrained consumption and added downward pressure on prices. High borrowing costs early in the quarter also dampened investment and consumer spending, affecting the demand for PU Resin products.
Within the USA, where the most substantial price changes were observed, the market exhibited a consistent downward trajectory throughout the quarter. Seasonal variations played a role, with reduced construction activities at the outset and ongoing economic uncertainties influencing purchasing patterns. Despite efforts to stabilize costs, including adjustments in feedstock pricing, PU Resin prices decreased by 2% from the previous quarter. Comparatively, there was no change in prices compared to the same quarter last year, indicating a prolonged period of price adjustment rather than recovery. Examining the quarter in halves, prices showed a persistent decline, with a 1% decrease between the first and second halves of the quarter. This trend underscored the ongoing challenges faced by producers and distributors in maintaining stable pricing amidst fluctuating market conditions and evolving consumer behaviours.
Closing the quarter, the price for Polyurethane Resin Rheology Modifier FOB Houston stood at USD 1810 per metric ton, highlighting a sustained negative pricing environment that prevailed throughout Q2 2024. This pricing trend reflected the combined impacts of reduced production costs and subdued demand, painting a challenging picture for the PU Resin market in the USA.
APAC
In the second quarter of 2024, Polyurethane (PU) Resin prices in the APAC region continued their persistent decline, driven by several decisive factors. The market was notably affected by an oversupply situation that outpaced subdued demand, particularly evident in the construction sector. Declining prices of key feedstocks like TDI and Polyol further lowered production costs, contributing to the downward pressure on PU Resin prices. Additionally, logistical hurdles and high freight expenses due to port congestions exacerbated the surplus supply, intensifying the price decline. Despite expectations of increased demand from sectors like automotive and residential construction, their underperformance failed to counterbalance the oversupply. Japan experienced significant price fluctuations during this period, reflecting broader regional trends but with heightened severity. Prices dropped sharply by -13% year-on-year and -8% compared to the previous quarter, indicating a stark downward trajectory. Seasonal factors that typically drive-up demand during peak summer construction months had limited impact this year due to existing high inventories and sluggish project starts. The correlation between reduced feedstock costs and final product pricing was evident, as lower input expenses did not stimulate sufficient demand to offset the surplus supply. Comparing the first and second halves of the quarter, prices continued to decline by -2%, maintaining a consistent downward trend. The quarter concluded with Polyurethane foam (flexible) Ex-Tokyo priced at USD 4565 per metric ton, echoing the negative pricing environment prevalent throughout the period. Overall, the pricing sentiment in Q2 2024 was decisively negative, reflecting a market grappling with surplus supply, reduced production costs, and lacklustre demand conditions.
Europe
In the second quarter of 2024, the European Polyurethane (PU) Resin market saw a significant uptick in prices, driven by several pivotal factors. Major cost escalations in key feedstocks like MDI, TDI, and Polyol, with increases around 5%, 2%, and 4% respectively, played a central role. These hikes were compounded by challenging supply chain conditions marked by labour strikes and logistical disruptions, further pushing production costs higher. Additionally, a rise in crude oil prices by approximately 4% added to the overall cost burdens. Demand dynamics contributed to the bullish sentiment, notably with increased orders from the British construction sector offsetting sluggish demand from other parts of Europe. Despite ongoing contraction in manufacturing activities, there were signs of recovery as companies adjusted inventories and production levels to align with reduced demand, signalling cautious optimism. Germany experienced the most significant price fluctuations within Europe, recording a 7% increase from the previous quarter despite a slight 1% decrease compared to the same period last year. The market trend in Germany remained stable with a positive tilt, buoyed by seasonal factors that saw a 1% price rise from the first to the second half of the quarter. This increase was influenced by improved supplier delivery schedules and managed supplies amidst logistical challenges and disruptions from flooding. Closing the quarter, PU Resin prices for flexible foam FD Hamburg stood at USD 2652/MT, reflecting a steady yet mildly bullish market outlook. In summary, the pricing landscape for Polyurethane Resin in Europe during Q2 2024 was shaped by rising production costs and moderated supply-demand dynamics. This led to a stable pricing trend overall, underpinned by cautious optimism amid ongoing challenges in the supply chain and varying regional demand patterns.
For the Quarter Ending March 2024
North America
The North American Polyurethane Resin market exhibited an overall mixed market situation during the opening quarter of 2024. During the opening month of this year, the North American Polyurethane Resin market was driven by low demand from the downstream automotive sector as automotive sales declined due to prevailing post-festive dullness and challenging weather conditions which led to the slow circulation of the product.
The second month of this year also witnessed another decline in the prices of the product due to low demand from the international market and the congestion at the Panama Canal which prevented suppliers from exporting shipments importing European and Asian markets and heightened manufacturing activities, which eventually led to stockpiling of the product.
However, conditions improved during the termination of this quarter as the US construction and automotive industries continued to expand, thereby providing gradual support to the North American Polyurethane Resin market. Overall prices of Polyurethane Resin across the North American market were recorded to have declined by approximately 2% during the opening quarter.
Asia
Throughout the initial quarter of 2024, the Asian Polyurethane Resin market remained bearish, with prices depreciating by around 8 percent during this period. Despite cost support from the feedstock side, evidenced by increases in Toluene Diisocyanate (TDI) and Polyol prices, both rising by approximately 5%, low demand from the downstream construction industry drove the market. Despite challenges in the supply chain, such as logistical and transportation issues stemming from the Noto Earthquake early in the year, higher costs in these areas did not reflect in the final product prices. The market was mainly influenced by the sustained downturn in the construction sector, evident in declining residential starts and public construction orders. Additionally, many construction firms faced rising input costs, leading to project deadline extensions, reduced initiation of new projects, and inventory postponements. Consequently, stockpiling occurred, prompting suppliers to decrease product prices. Export conditions remained unfavorable due to ongoing crises at the Red Sea and drought conditions at the Panama Canal.
Europe
During the opening quarter of 2024, the European Polyurethane Resin market experienced a mixed situation. Initially, prices of the product declined by 5% in January 2024, attributed to the lack of support from production costs, evident in the decreased prices of feedstocks Methylene Diphenyl Diisocyanate (MDI) and Toluene Diisocyanate (TDI), which dropped by approximately 4% and 1% respectively. However, the market rebounded in the middle of the quarter, with prices increasing by approximately 5% in February 2024 and an additional 1% in March 2024. Despite the predominantly bullish market, demand-side support from the downstream construction sector remained lacking in Germany, as indicated by diminishing permits and construction projects. Real estate firms maintained a pessimistic outlook for the year, with historically negative investment sentiments across all segments of the construction sector—residential, commercial building, and civil engineering activities. Nevertheless, during the middle of the quarter, the European Polyurethane market received demand-side support from improved demand in the importing British, Dutch, and Belgian markets, where the construction sector showed signs of improvement, contributing to the European PU Resin market's overall improvement. Additionally, challenging conditions in the existing supply chain, such as strikes by union workers leading to limited railway functionality and transportation and logistics constraints, may have also contributed to price increases.
For the Quarter Ending December 2023
North America
Prices of Polyurethane Resin have depreciated by approximately 1.5% in the US market and then increased by 2% largely driven by the prices of feedstock Methylene Diphenyl Diisocyanate and Toluene Diisocyanate.
The demand from the downstream paints and coating part of the automotive industry was recorded to be strong towards the end of the fourth quarter, particularly from importing Mexican and Brazilian markets where nearshoring activities strengthened. As major players in the automotive industry continued to set up manufacturing facilities across Mexico, the demand for automotive paint increased.
Towards the end of the fourth quarter, the automotive industry across Mexico witnessed a surge of 13% in automotive sales which was the prime reason for the improvement of the market situation of Polyurethane Resin across the United States. The healthy performance of the domestic automotive industry towards the end of the fourth quarter also played a significant role in maintaining the demand from the automotive industry as evidenced by the increment of 10% in the automotive sales.
APAC
The APAC Region witnessed the most fluctuations in the prices of Polyurethane Resin with prices initially depreciating by 2% in October and then increasing by approximately 3% in November and December. During October, prices of PU Resin were mainly driven by the feedstock Toluene Diisocyanate and Polyol market which eased production costs, however, the festive period of December improved purchasing sentiments in the importing US and European markets. This consequently continued to the increments in the prices. Major retailers across the importing US market were reported to have been giving discounts in the downstream furniture industry to keep purchasing activities firm. This further compelled supplier based in Japan to increase the prices of the product. Towards the middle of the last quarter of 2023, the major Japanese manufacturers noted an increment in input costs including labor and energy. This also prevented the prices of the product from depreciating. Orders of exports were recorded to be largely positive as manufacturers completed existing backlogs and received fresh orders from US and European clients.
Europe
The Polyurethane Resin witnessed a largely bearish trend in the European market with prices depreciating by approximately 6% (within the quarter). This was largely driven by depreciating prices of Methylene Diphenyl Diisocyanate and Toluene Diisocyanate whose prices plummeted by approximately 7% and 11% respectively., easing production costs. The market situation of Polyurethane Resin across Europe was also largely influenced by the poor performance of the construction industry which continued to be retrenchment for the thirteenth consecutive month towards the end of the fourth quarter of 2023. All sectors of the construction industry including housebuilding, commercial building, and civil engineering activities witnessed contraction with housebuilding continuing to exhibit the poorest performance in the 4th quarter of 2023. Residential permits continued to decline for the eighth consecutive month with subcontractor availability easing for the sixth consecutive month. Declining workloads also compelled pushbacks of inventories and job shedding across the construction industry. Several real estate firms also noted that demand conditions across the construction industry remained highly unfavorable and investment sentiments continued to be pessimistic for the thirteenth consecutive month.
For the Quarter Ending September 2023
North America
Prices of Polyurethane Resin (Rheological Grade) have witnessed a bearish trend in the North American market, with the prices witnessing an overall depreciation of 1%. However, prices of Polyurethane Resin (Rheological Grade) did witness a bullish in the middle of 3rd Quarter of 2023 when prices of the product increased by almost 2%. The overall depreciation in the prices is attributed to the declining prices of Methyl Diisocyanate and Toluene Diisocyanate, which declined by almost 14% and 15%, which eased production costs. The recovery of the construction sector industry was insufficient as mortgage construction of new buildings was mostly halted due to increasing interest rates by the Federal Bank, which further generated a negative outlook on the sentiments of investments in the construction industry. Moreover, demand for the product as a paint modifier was also low as automotive sales increased by only 2.2% in September 2023, with minor appreciations expected in October. Moreover, the automotive industry was drastically affected by the strikes carried out by the Union Workers, which negatively impacted the consumption of PU Resin (Rheological Grade).
APAC
Prices of Polyurethane Resin (Foam Grade) resin have witnessed a bearish trend in the Asian market by approximately 3% in the Asian market due to declining prices of feedstock Toluene Diisocyanate, which also declined by approximately 3% in the Asian market, which eased production costs in the 3rd Quarter of 2023. The prime reason for the depreciation in the prices of the product is primarily attributed to slow demand from the international market. Moreover, the insufficient recovery of the construction industry across North America had also drastically affected the demand for PU resin across Asia, which led to few orders of imports of the product. Domestic demand was moderate, as evidenced by residential sales witnessing a stagnancy in the 3rd Quarter of 2023 and declining by more than 9% on a year-on-year basis. The anticipated revival of the construction industry across the prime exporting markets of Europe and North America did not materialize because of sluggish economic conditions. This consequently led to an accumulation of inventories across the Asian market as pushbacks continued to occur.
Europe
Prices of Polyurethane Resin (Foam Grade) have witnessed a stable market situation in the European market in the 3rd Quarter of 2023, despite prices of feedstock Toluene Diisocyanate depreciating by almost 15%. This was largely due to the healthy performance of the automotive industry across Europe, except Germany, as the automotive showed a strong performance towards the end of the 3rd Quarter. Automotive sales almost tripled in the UK and increased approximately by almost 10% in France, Netherlands, and Belgium towards the end of the third Quarter. Amidst depreciating production costs, the heavy demand helped counterbalance the prices of Polyurethane, which consequently created an adequate gap between demand and supply and compelled the prices to be mostly stable. However, demand from the construction sector was not healthy as input costs across the United States as the Federal Bank hiked interest rates again in August 2023, which marked the 11th consecutive hike since COVID Levels and expectations of rising 25 basis points towards the end of December 2023.
For the Quarter Ending June 2023
North America
The overall market situation for Polyurethane in North America was bearish in the quarter ending June 2023, with the prices of Polyurethane witnessing a depreciation despite a marginal improvement of the US economy and optimistic purchasing activities from household, automotive and construction sectors at the beginning of the second quarter of 2023. However, insufficient economic growth and uncertainties about the US economy entering into recession kept the market majorly low in the middle of the quarter, along with the ease in the feedstock isocyanates and Polyols amidst a decline in the upstream crude oil price trend across the region. Meanwhile, an increase in capacities and consistent production rates affected the PU Resin pricing dynamics in the US market. At the termination of the Quarter ending June 2023, supply remained moderate as the decreasing prices of the raw materials and crude oil being subsidized aided in production. However, due to the muted export orders from international markets owing to the increment of interest rates by the Federal Reserve by almost 5%, demand remained largely slow. Finally, The latest prices of Polyurethane(PU) FOB Houston in texas Houston at the quarter ending was listed at USD 1863/MT..
APAC
The overall market situation for Polyurethane showed mixed sentiments during the second quarter of 2023 in APAC, with a drop in April, a rise in May, and then again a plunge in the price trend of the product. The muted demand from the coating and construction industries was followed by a marginal gain in demand from the automotive industry during this quarter. Towards the middle of the second quarter of 2023, export orders from overseas markets also saw a surge along with the volatility in the prices of crude oil, which further disrupted production. The increment in the prices of Polyurethane was primarily attributed to the rise in the demand from the automotive industry as purchasing activities of the consumer increased substantially in the automotive sector, despite a slow economic recovery of the overall Asian market. At the end of the quarter, the supply remained moderate as manufacturers found themselves with adequate inventories, and production ran smoothly due to a fall in the prices of crude oil. While the demand was slow in the beginning from the downstream coating industry, the demand from the automotive sector managed to maintain prices by the end of the second quarter of June 2023. Towards the end of the second quarter, prices of Polyurethane were listed at USD 3484/MT PU Foam Resin FOB Shanghai.
Europe
The prices of Polyurethane witnessed a depreciation of around 3% in the second quarter of 2023, with the overall bearish market situation in the European market. The primary reason for this depreciation was attributed to the sluggish demand from the household, automotive, and construction sectors and to the bleak export offers. This was further bolstered by the traders with surplus stocks, which had to be given off at discounted prices, thereby diminishing marginal profits. Also, the fear of the European economy entering recession prevented purchasing activities from the downstream sector and international offtakes. Supply remained optimal at the beginning of the second quarter but was reduced as downstream purchasing activities diminished to mitigate the oversupplied market. Demand remained at an all-time low due to a pessimistic outlook on the slow economy of Europe as the overall PMI declined from 48 to 39. At the termination of the second quarter of 2023, the final prices of Polyurethane Resin Flexible foam were recorded to be USD 2722/MT FD Hanburg.
For the Quarter Ending March 2023
North America
Due to abundant stocks and slower inquiries in the downstream automotive and other competitive industries, the price of PU Resin in the United States dropped in the quarter ending March 2023. Additionally, rising interest rates and poor consumer spending attitudes knocked on PU Resin offers in the US market. The PU Resin manufacturers were also facing competitive cost pressure in the US domestic market, which influenced the commodity's final negotiations this quarter. Furthermore, the feedstock polyols and isocyanates stability contributed to the downward commodity's price trajectory by supporting the manufacturing cost pressure on PU Resin market participants. Thus, the price of the PU Resin Rheology Modifier was assessed at USD 1910/MT FOB Houston (USA) in the first quarter of 2023.
APAC
The price trend of PU Resin in the Asian market remained unchanged during the first quarter of 2023, as the downstream construction and automotive industries exhibited slow demand and limited stock availability. In response to rising feedstock Polyols and isocyanates prices, manufacturers in China reduced their production rates in mid-Q1. Towards the end of the quarter, the market experienced a supply shortage due to the surge in crude oil prices, causing an increase in commodity prices. This cost pressure may have been passed on to consumers, resulting in a slight price increase. The reduction in the demand-supply gap resulted in a stable price trend for Asian PU Resin during Q1.
Europe
The European PU Resin market witnessed mixed sentiments in the quarter ending March 2023, with recent price stability in March 2023. Prices stagnancy in Germany resulted from the weak demand from the downstream construction sector and declining production run rates in the country. The PU Resin prices witnessed an imbalanced market situation in Germany, backed by the prolonged soft demand from the automotive industry of the country. However, European PU Resin enterprises felt provoking wide uncertainty from the market players as OPEC discontinued crude oil production, and sanctions disrupted the Russian output at the termination of March 2023. Moreover, the European strikes are the latest in a series of industrial actions that have gripped big economies in response to rising prices and restricted the buying sentiments for the product this quarter.
For the Quarter Ending December 2022
North America
The price movement of Polyurethane (PU) resin showed a drop in the Quarter ending December 2022, and the bearish market for PU Resin resulted from the lower automotive demand and feedstock polyols and isocyanates costs in the North American region. The feedstock TDI prices fluctuated owing to uncertainty in the crude oil prices during Q4 and diminished market activity for PU resin in the last quarter of 2022. The market uncertainties due to recessionary fears and the onset of the high inflationary input cost pressures weighed on the domestic offtakes in the downstream Automotive sector for the product in this quarter. Moreover, the demand for PU resin remained silent in the construction and household sectors due to lower house-building demand amongst consumers in the US market during Q4. Therefore, the price of the PU Resin Rheology Modifier hovered around USD 2024/MT FOB Houston (USA) in December 2022.
APAC
The price trend of Polyurethane (PU) Resin has showcased overall bearish market sentiments in the APAC region during the Quarter ending December 2022. The consistently decreasing isocyanates costs in the regional market due to the consequent reduction in the upstream cost pressure amid lower crude oil prices conclusively led to a dip in the values of the commodity. Meanwhile, the COVID lockdown disturbances and delays in the cargo momentum also diminished the market participation of PU Resin in the downstream Automotive and construction sector of the Chinese market this quarter. Additionally, speculations owing to the recession in the international market negatively affected overseas trade and shipping rates in China, elevating domestic inventory levels. Therefore, the price of Polyurethane (PU Resin) was assessed at USD 3536/MT FOB Shanghai (China) in December 2022.
Europe
Polyurethane (PU) Resin prices hovered at lower values in the Quarter ending December 2022, with a decline in the automotive offtakes in the European region. The ease in the feedstock MDI and Polyol prices supported the PU resin production costs amidst crippled supplies of upstream Crude oil in the region by Russia. Weakening demand due to high energy costs, soaring inflation, and a depressing economic outlook weighed on the overseas offers and across the regional market this quarter. The PU Resin market players remained cautious about the decreasing output in November and concerned about tightening economic conditions and growth prospects; however, they made sales at lower margins amid the fear of piling of stocks towards the end of the year. Thus, the price of PU Resin flexible foam hovered around 2934/MT throughout December 2022.
For the Quarter Ending September 2022
North America
The price movement of Polyurethane resin took a rise in the third Quarter of 2022, and product prices were impacted by the domestic demand and feedstock prices in the North American region. The feedstock TDI and Propylene Oxide prices fluctuated during Q3 and slightly elevated the PU resin prices in September 2022. Meanwhile, some marginal shifts in the raw material Isocyanates and Polyol costs due to upstream costs resulted in no significant change in the production costs of the commodity in the 3rd Quarter. The demand for PU resin remained moderate in the construction and household sectors due to lower house-building demand amongst the consumers in the regional market during the period.
Asia
The price trend of Polyurethane has showcased mixed sentiments in the APAC region during the Quarter ending September 2022. Lower raw material isocyanates and Polyol costs in the regional market led to an ease in the values of the commodity in the region. Meanwhile, diminished product orders and moderate offtakes from the downstream polymer industries negatively affected the price quotations during this time period. The COVID-19 lockdown disturbances and cargo momentum delay also squeezed the market participation of the product in the region during the third Quarter of 2022. Therefore, the price of Polyurethane (PU Resin) was assessed at USD 6341/ton Ex-Tokyo (Japan) in September 2022.
Europe
Polyurethane (PU) Resin prices maintained upward movement after the July decline in the European Region during this Quarter. The feedstock TDI, MDI, and Polyol prices rose sharply due to a steep rise in petrochemical prices amidst crippled supplies of upstream Crude oil in the region by Russia. The rising energy and fuel costs significantly impacted the commodity's pricing dynamics and curtailed production rates. On the demand side, the domestic offers for PU resin relaxed in the construction and household sector. In addition, product supplies were affected due to container shortages at the ports of Europe. The product offtakes remained silent in the regional market during Q3, and market players felt input cost pressure.
For the Quarter Ending June 2022
North America
Throughout quarter 2, the price movement of Polyurethane resin remained bearish, and product prices declined in the North American region. The feedstock TDI and Propylene Oxide prices fluctuated during Q2, impacted by volatile upstream petrochemical costs. At the same time, Polyol and MDI prices were diminishing, which negatively impacted the product’s production cost by reducing the cost pressure. Additionally, the energy and fuel costs rose in the region. The demand for PU resin remained modest for furniture and sealants from the construction and household sectors, due to which the product offtakes remained average in the regional market during the period.
Asia
In the Asian region, the price trend was oscillating during Q2 of 2022 as the feedstock prices frequently fluctuated due to volatility in the petrochemical and Crude Oil market. During H1, feedstock Polyol, MDI, and TDI prices rose sharply and then stabilized and started declining, which impacted the PU resin’s production cost throughout the quarter and its price quotations in the regional market. In China and India, the demand remained strong from the furniture and construction sector, due to which prices rose quarterly by 4 to 6%. On the other hand, the end-user demand in Japan and other Asian countries remained low, due to which the product offtakes remained modest in the regional market.
Europe
The price trend of Polyurethane (PU) Resin remained firm in the European Region, and product prices rose during Q2 of 2022. At the H1 of the quarter, feedstock TDI, MDI, and Polyol prices rose sharply due to a steep rise in petrochemical prices caused by supply shortages of Crude oil in the region. Also, the energy and fuel costs rose significantly due to the gas shortages, and production rates were curtailed as the demand for the PU resin slackened in the construction and household sector. Also, product supplies were affected due to container shortages at the European ports, and freight costs also rose in the region. The product offtakes remained modest from the regional market during the Q2.
For the Quarter Ending March 2022
North America
In North America, the prices of Polyurethane Resin were observed to be stable in the first quarter of 2022 due to an increase in demand from downstream paints, coatings, sealants, plastics, etc. As the North American polymer industry moved into 2022, robust demand for epoxy and PU Resin was robust throughout the quarter. The industry also experienced increased capital expenditure as leading industry players focused on building capacity and expanding into growing end markets through the downstream paints and coatings sector, leading to price stability. The prices were increasing in January and attained a stable trajectory in the upcoming months of the first quarter in the USA.
Asia Pacific
Higher discretionary consumption led to a steep escalation in demand for polymer products in Asian geographies like China and India in the first quarter of 2022. The price of PU Resin was USD 4435/ton for two Components PU Resin FOB Shanghai at the beginning of January in China but in mid-February it fell in the Asian market. Capacity expansion and heavy investment by investors on the R&D front and backward integration have boosted the segment. Dwindling inventories, rising cost pressure, supply shortage, lower availability of feedstock, and import substitution supported increasing the prices of PU Resin. Volatility in the prices of the upstream crude due to the ongoing war between Russia and Ukraine has increased the prices of the PU Resin.
Europe
The European market saw stability in the prices of PU Resin with a surge at the beginning of the quarter and steady prices in the further months of Q1 2022. The industry faced margin pressures amid raw material cost inflation, which remained high through the first month of Q1. These robust demands from end-user industries of sealants, floor coatings, paints, etc., were the reason to drive the steady prices of PU Resin in the polymer market of European regions, especially in Germany. Limited inventories, supply, and production of the product contributed to the trend of PU Resin in Europe.
For the Quarter Ending December 2021
North America
The North American Polyurethane market had added an extra 5.7% market value in FY21 compared to the FY20 levels. The contracts for October were USD 0.11/pound higher than the September contract offers. The prices of critical feed stock polymeric Methane Di-Isocyanide were highest in the second half of FY21 during the month of October. Toluene Di-Isocyanide offers too were offered at higher prices by Huntsman, BASF, and others. Demand from the packaging industry was strong before the holiday season but was not enough to offset the reduced demand from the Automotive and Household sector. Demand is expected to increase in the new year with forward contracts offered by most manufacturers for the month of January being higher than December levels. Spot trade will see more volumes being exchanged by the last week of January.
Asia
Asian polyurethane market saw an increase in prices in the last quarter of FY21 compared to the Q3 levels as production was hit by the energy crisis that troubled Chinese manufacturing in the months of October and November. Add to that the higher costs of raw materials such as MDI and TDI due to higher freight costs for import had led to an overall increase in prices of polyurethane foam, adhesive and sealant grades. India too had seen a significant rise in prices as the PU market was struggling to match supply with demand during the fourth quarter of FY22. The prices of Sealant and Adhesives grade were 4.6% and 8.4% higher compared to the Q3 levels when assessed on an Ex-Delhi NCR and Ex-Mumbai basis, respectively. The January contracts are expected to be higher than those offered in December.
Europe
European polyurethane market saw a tight supply during Q4 of FY21 as high freight costs added to inflated costs of critical raw materials MDI and TDI had rendered the margins unviable for manufacturers. The tightness however, eased by the last week of November ahead of the Christmas holiday season. The demand fell since the second week of November due to lower requirement from end user industries such as automotive, foams, adhesives and sealants. The prices are expected to be higher during the first quarter of FY22 due to a surge in demand as well as higher energy costs as costs of both brent crude as well as Natural gas are expected to see a sharp spike in the months of January and February. The month of January could also see inventory buildups which may come back to bite the sellers owing to unexpected lockdowns and logistic bottlenecks caused by the new wave of pandemic.
For the Quarter Ending September 2021
North America
In the third quarter of 2021, Polyurethane resins market showcased lopsided sentiments in North America produced by the snug supply of the product while demand remained robust. Packaging, Construction, and other industries were the key sectors of consumption of PU resins. A substantial surge in the prices of PU resins was observed in September as hurricane season peaked due to which many industries remained shut as a part of emergency plan. It affected the production rates as upstream raw materials went scarce. Severe weather conditions also disrupted the supply chains that directly led to the increment in the prices of PU resins in the region during the third quarter. Moreover, mirroring the path of previous quarters, Q3 also measured high freight charges which also contributed to the overall cost of Polyurethane resins.
Asia
In Asia, Polyurethane (PU) market witnessed an uptrend supported by the soaring prices of upstream MDI. Polyurethane resins market in China traced a proliferative trajectory during the third quarter of 2021 due to the strong demand from the downstream sectors and the tight supply of key feedstock MDI. Several petrochemical manufacturers were compelled to curtail their production rates followed by the energy crisis and dual control policy to reduce the carbon emissions which snowballed to the scarcity of feedstock MDI in the domestic as well as in the international market. In addition, congestion on the several ports of China further sent the PU market in disarray. Hence, in this quarter, PU resins prices witnessed a steep climb in China, which also epitomized in the lopsided PU market dynamics globally as China is among the major exporters of PU resins and upstream MDI across the world.
Europe
In Europe, Polyurethane market mirrored the market dynamics of Asian pacific region. A steep climb in the prices of Polyurethane resins market was seen supported by the hike in the feedstock MDI prices. Moreover, lower production rates in the domestic market because of the natural gas crisis and delayed supply from Asia due to the congestion on ports of Asia Pacific also influenced the prices of PU resins in the region. Meanwhile, demand from the domestic as well as overseas market remained robust throughout the quarter. Hence, constrained supply and robust demand contributed to sudden and substantial spike in the prices of Polyurethane resins in Europe.
For the Quarter Ending June 2021
North America
Polyurethane prices in USA climbed up during this quarter, due to limited availability of feedstock MDI across the region. USA imported feedstock MDI from Europe due to domestic supply tightness amid stable to firm demand from domestic market. Downstream furniture manufacturers in USA revealed that, they had to stop their production activities due to low domestic availability of PU during this quarter. In addition, due to the devastation in US Gulf coast during February, inventory level of upstream remained insufficient to satisfy the overall requirement, while manufacturers ensured releasing the backlog order at the same time. Therefore, under firm demand fundamentals and limited availability, prices of Polyurethane increased effectively in USA during Q2 2021.
Asia
Overall demand for Polyurethane kept fluctuating in Asia, due to unstable demand from regional market. In China, manufacturers revealed that they experienced huge export demand for feedstock MDI from North America followed by Europe and Asia, which drove the overall market dynamics. In the meantime, regional market fundamentals for PU remained positive due to stable offtakes. However, the demand from Indian market remained dull due to sudden surge in Covid cases in the country, while under movement restrictions, people remained more inclined towards essentials. Therefore, under the pandemic mayhem demand for PU from downstream furniture and automotive sectors remained bearish throughout the quarter in India.
Europe
Europe experienced a huge price hike for Polyurethane during Q2 2021, due to regional scarcity of raw material. Curtailed supply activities in the domestic market of USA increased the export demand for feedstock MDI and Polyurethane from Europe during this timeframe. While ensuring sufficient offloads to USA, European PU buyers experienced an effective shortage for feedstock MDI and PU in their respective countries. Thus, regional prices of Polyurethane increased effectively under the market scenarios.
For the Quarter Ending March 2021
North America
The global supply of Polyurethane was already tight during Q1 2021 and a rare winter storm across US gulf region worsened this situation. Hit by the storm, several plants including refineries across the region faced forced shut down that created the severe shortage of the feedstocks MDI and TDI. Although demand from the domestic market was moderate, export demand from several Asian countries was exceptionally high. Extremely low temperature forced Covestro to announce force majeure at its MDI and TDI plants across the US gulf. Similarly, several other plants producing MDI and TDI in Texas, Louisiana, Mississippi, and Florida were impacted by this rare weather condition.
Asia
While there was consistent increment in the overall demand of Polyurethanes in Asia, the supply remained strictly low across the region. The global price of PU was increasing rapidly, due to severe product shortage and dented supply chains due to a sequence of events across the globe. In addition, lower industrial production in several Asian countries like China and South Korea, also reduced the domestic output of PU in the country. Meanwhile, during Chinese Lunar New Year holidays, China’s domestic output reduced that pressured inventories levels of several suppliers, thereby driving PU offers to exceptionally high in the beginning of March. Surge in the prices of feedstock MDI and TDI further supported the uptrend.
Europe
The overall demand for PU in Europe remained low during Q1 2021 due to slow production activity in the domestic automotive sector. Overall prices of PU remained extremely high due to high demand outpacing the production levels. Hike in the price was also affected by the freezing weather condition across Europe which halted the supply of feedstock MDI and TDI across the region. The European Automobile Manufacturers Association has anticipated around 10% growth in the regional Automotive sector in 2021 which will improve the demand for PU across the region in forthcoming quarters.
For the Quarter Ending December 2020
North America
During October 2020, BASF started its MDI manufacturing plant expansion program from 300,000 tons/year to 600,000 tons/year in Louisiana. This plant will increase the production of MDI to ensure continuous availability of feedstock for PU manufacturing in the North America region. During Q4 2020, USA suffered with the shortage of raw material buoyed by congestion at ports and lack of shipping containers which forced companies to await the delayed shipments. Lack of product availability triggered abrupt increase in the price of MDI and eventually of Polyurethane Resins.
Asia
Due to consistent increment in demand of Methanol to produce MDI and PU, Wanhua, the world’s largest upstream MDI manufacturing unit established its new methanol plant of 600,000 tons/year capacity during October 2020 in China. This plant is aimed at increasing the supply of upstream MDI for the production of PU resin to cater to soaring product demand. Shortage of feedstock triggered a sharp surge in PU prices across several countries including India. Price of both PU adhesives and Sealants witnessed a sharp increase in December buoyed by growing demand prospects and escalating raw materials.
Europe
The second wave of COVID-19 infections impacted the European automobile sector significantly and led to downfall of many other linked sectors. Polyurethane demand was low, due fall in demand from the automobile sector. As per data, automobile sector of Spain was contracted by around 17% during November 2020. With players struggling to protect their margins, production of MDI and PU was way below the anticipated levels, leading to increase in the price of PU resin in the key European countries.
