Isocyanates prices continue to firm as supply is disrupted and demand is strong.
During October and November, supply in North America tightened further following planned and unplanned shutdowns as hurricanes hit the US Gulf Coast. Most MDI producers cited a lack of raw materials as the reason for closures. The hurricanes led to high numbers of logistics issues and sourcing feedstocks has been very difficult. One producer said upcoming turnarounds could now potentially be brought forward while the plants are closed. Dow declared force majeure on all MDI products in October citing ongoing disruptions caused by the storms. Dow has a 340 ktpa MDI plant in Freeport, Texas. In mid October, Huntsman announced it had reduced its run rates at its MDI plant in Geismar, Louisiana. The company said an operational issue at a feedstock provider was causing reduced MDI production. Covestro declared force majeure at its MDI plant in the middle of October. Covestro has a 320 ktpa MDI plant in Baytown, Texas.
The European MDI market also firmed due to supply tightness and healthy demand. Supply disruptions in the US were also affecting the European market. Supply in Europe was mostly restored in November but there were rumours that a major European producer is still having issues with MDI. MDI demand continues to perform beyond expectations. Construction is doing very well even though usually the market begins to slow down in November. December is expected to be softer than November as the winter months arrive and potential COVID-19 related lockdowns take place.
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