For the Quarter Ending December 2024
North America
The North American Polyurethane Resin market continued to experience a bearish market situation, with prices falling by approximately 8% during the last quarter of 2024 despite challenging conditions due to seasonal hurricanes. The decline in prices was primarily driven by the fact that U.S. suppliers had built ample inventories during October 2024, which they continued to utilize. Demand conditions in the domestic market remained unfavorable, with construction spending witnessing declines throughout the quarter.
Homebuilding confidence remained low and below the 50-threshold, leading to slow consumption of the product. Export conditions also remained unfavorable due to the strike between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), which caused a backlog of vessels and resulted in inventory accumulation across ports.
Towards the end of 2024, destocking activities gathered momentum, leading U.S. suppliers to liquidate existing inventories. The overall U.S. polyurethane market was reported to be driven by ample inventories, with disciplined procurement sentiment and no significant disruptions observed as suppliers remained under pressure to liquidate stocks amid fears of inventory devaluation and year-end tax repercussions, contributing to the bearish momentum of the market.
Europe
The European Polyurethane Resin market experienced predominantly bearish conditions during the last quarter of 2024, despite improvements in supply conditions. With the majority of producers returning to production after the summer holidays, supply conditions gradually improved. However, demand from the construction sector remained low, leading to continued weak off-take and resulting in a bearish market. In the middle of the quarter, suppliers focused on liquidating existing inventories, with extended holiday breaks contributing to lower market activity. Export conditions were largely unfavorable, as arbitrage opportunities in and out of Europe remained mostly closed, and inland trading faced disruptions. Towards the end of November 2024, some producers made quiet attempts to raise prices, but these efforts were largely unsuccessful due to ample supplies. As December progressed, with liquidation activities underway, producers attempted to stabilize the market by reducing production rates. However, the overall market sentiment remained weak, dominated by slow demand and inventory liquidation.
APAC
The Asian Polyurethane Resin market experienced a depreciation of approximately 2% during the last quarter of 2024, driven by unfavorable demand conditions from the domestic construction sector. Despite rising feedstock TDI prices, particularly following a price revision by major producers like Toray Lycra (which raised prices by 30-50 yen per kilogram for shipments after November 1st, 2024), the market failed to exhibit bullish sentiment. In Japan, inventories of Polyurethane Foam decreased slightly from 4,047 thousand tonnes to 3,994 thousand tonnes in October 2024, as reported by the Japanese Ministry of Trade and Industry. Meanwhile, production of Polyurethane Resin rose by 10.3%, from 14,442 tonnes to 15,942 tonnes, but this increase in production added downward pressure on the market. Shipments also grew by 10.8%, from 13,608 thousand tonnes to 15,081 thousand tonnes in October. Despite this, overall market sentiment remained bearish, with subdued activity exacerbated by the U.S. market’s holiday shutdown, which hindered inventory flow to Japan. Stability in Polyurethane Resin prices was supported by stable feedstock TDI prices, and moderate inventory levels across Japanese warehouses helped maintain mostly stable quotations during the period.
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.
