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Global isocyanates markets 2023: Mid-year review

June 19, 2023 | Tecnon OrbiChem

Price flux graph for isocyanates between 2015 and 2023.

A whitepaper Tecnon OrbiChem published earlier in 2023 outlined the reasons why isocyanates markets had been seasonally quiet a year prior.

Logistics issues, it said, had impacted North American markets. Demand for methylene diphenyl diisocyanates (MDI) and toluene diisocyanates (TDI) was quiet in all regions and activity had been low. In fact, after Russia invaded Ukraine in March 2022, chemical markets were left in distress. And that trend continues to the present day.

Market volatility was the immediate effect of the outbreak of the war. Then, in April, a clearer picture of Europe’s dependence on Russian natural gas emerged. Natural gas prices remained high for most of 2022. This kept energy and production costs elevated, triggering a cost of living crisis in Europe and high inflation in other regions too. 


Source: Tecnon OrbiChem

Volatility abounds

There was a significant decrease in demand compared to the Covid-driven surge in flexible foam demand for soft furnishings. The fact that lockdowns ensured consumers were forced – or chose – to stay at home impacted isocyantes markets favourably. TDI market participants emerged from the Covid-19 era in healthy positions.

New free eBook download:

Global isocyanates market 2023: Mid-year outlook

Go to mid-year 2023 eBook form

European MDI and TDI producers' surcharge suggestions - due to the high cost of energy - were resisted by buyers. Their resistance prevailed off the back of ongoing low demand. As Shanghai's citywide lockdown closed several MDI and TDI units there, supply tightness permeated the region. Demand remained low though.

A montage pf the pages within the isocyanates eBook.

The latter part of 2022 saw escalating raw materials costs in Europe due to the ongoing war coupled with logistics issues. As 2023 temperatures begin to rise for the summer months, it's worth remembering the river Rhine's record low water levels in 2022. That was yet another thorn in the side of logistics because barges containing supplies could not navigate it.  

'...TDI saw small upward movement in demand in May 2023 and the rest of Q2 is expected to see stable volumes giving a much-needed boost to this market...'

Tecnon OrbiChem senior consultant Regina Sousa

in the free-to-download eBook Mid-year review

The Chinese lockdown meant local producers were sending MDI and TDI abroad at competitive prices, adding stress to European producers unable to compete with cheap imports. The US was also importing material due to raw material shortages.

On top of this demand was gloomy in all regions. To add further stress to European TDI markets, all of its TDI plants went offline in August 2022. BorsodChem eventually had one line producing but the lack of supply led to an impressive increase of €800/ton in European prices, a level not seen before.  

Until consumers have more disposable income, demand for downstream chemicals that go into the comfort and bedding sector will stagnate. This sector is particularly vulnerable because its final products have more longevity. For example, most people don’t buy a sofa every year, and the strong demand for comfort products seen during Covid-19 less buying interest now.

The lifting of the zero-Covid policy all over China earlier this year led to a small boost in market confidence. 

A link to the full whitepaper we published in January Global isocyanates market outlook 2023 & 2022 will be included - along with the latest eBook from Regina Sousa - in the email we send you.

Market monitoring

Tecnon OrbiChem provides globally relevant isocyanates price benchmarks and market trend insights for decision-makers. Factors and dynamics that impact the value chain are monitored and analysed by our 20-strong team of global chemicals sector consultants. Tecnon OrbiChem's objective analysis and reliable data spans six decades. It is this legacy that we leverage to help participants respond to industry's biggest challenges. 

Our chemicals data platform OrbiChem360 provides comprehensive chemical business intelligence leveraging six decades of analysis. It helps business managers plan strategically and optimise business performance.  

The free-to-download eBook Global isocyanates market: Mid-year outlook unravels the factors Sousa sees as at play for the remainder of 2023. Her focus is on Chinese, North American and European markets.

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