The Toluene Diisocyanate (TDI) market is primarily driven by its extensive application in producing polyurethane (PU) foams, which are widely used across various industries, including automotive, furniture, bedding, and construction. The demand for TDI closely correlates with the performance and requirements of these downstream sectors. In the recent quarter, the TDI market witnessed fluctuations driven by changes in consumer demand, feedstock availability, and broader economic factors that influenced production costs and market supply dynamics. The automotive and manufacturing sectors, significant consumers of polyurethane materials, experienced a downturn, impacting the demand for TDI. Additionally, the advent of bio-based polyurethane introduced a shift in market preferences, affecting the demand for petrochemical-based PU and isocyanates, including TDI.
The global toluene diisocyanate market size reached 2.4 Million Tons in 2023. By 2032, IMARC Group expects the market to reach 2.9 Million Tons, at a projected CAGR of 2.00% during 2023-2032. In North America, the prices witnessed a downturn primarily due to reduced demand from the polyurethane segment, which was significantly impacted by the automotive manufacturing slowdown amid the United Auto Workers (UAW) strike. This scenario was compounded by declining feedstock toluene prices at the quarter's outset, attributed to diminished demand and a drop in WTI Crude Oil prices. This drop was linked to stabilizing speculations about supply chain disruptions in the Middle East, despite ongoing conflicts. The situation was further exacerbated by an ample supply of Toluene Diisocyanate in the market and subdued demand post-Black Friday, leading to cautious buying activities. The introduction of bio-based Polyurethane also played a role in dampening the demand for petrochemical-based PU and Isocyanates, resulting in an almost 8% price reduction for TDI compared to the previous quarter.
In Asia, initial feedstock toluene price declines were reflected in reduced TDI production costs, while manufacturing sector slowdowns and reduced demand from the automotive and manufacturing sectors led to consistent price drops across the quarter. Maintenance shutdowns by key producers like Mitsui Chemicals in Japan and BASF in South Korea temporarily affected supply dynamics. However, the end of the quarter saw feedstock availability concerns amid rising supply chain issues through the Suez Canal after the Red Sea attacks. In Europe, the bearish trend was accentuated by low demand from the polyurethane segment, a shift towards bio-based alternatives, and a contraction in manufacturing activities as evidenced by the Eurozone Manufacturing Purchasing Manager's Index. The bursting of a housing bubble negatively impacted the wood furniture market, further diminishing PU foam demand.
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