The market has collapsed, a global raw material producer said, referring to the sharp fall in spot TDI prices in China and Hong Kong.
TDI, MDI and polyols are used for making PU foams used in a wide range of consumer products, including furniture and bedding, automotive components, footwear and refrigerators.
TDI prices were assessed at $2,800-2,900/tonne CFR (cost and freight) China and Hong Kong for the week ended 22 October, $500-600/tonne lower week-on-week, according to global chemical market intelligence service ICIS pricing.
Similarly, polymeric MDI prices were assessed at $1,950-2,100/tonne CFR China and flexible slabstock polyols prices were assessed at $1,800-1,850/tonne DEL (delivered), which were $100-150/tonne lower from the previous week.
Price is no longer a priority. It s more a question of survival now for many MDI producers, an international MDI supplier said.
Producers had little choice but to resort to steep price cuts as demand was virtually non-existent in the past weeks, leaving them grappling with rising inventory pressure, Asian traders said.
Despite the price cuts, regional trading had only picked up slightly with many PU foam makers holding back from making raw material purchases due to the bearish outlook for global consumer goods, they said.
Producers are expected to start cutting production rates in response to the poor market conditions, such as Japan s Mitsui Chemicals Polyurethanes, which recently halved its production.
Major PU raw material suppliers to Asia are Shell Chemical, BASF, Bayer MaterialScience, Dow Chemical, Huntsman, Yantai Wanhua, Mitsui Chemicals Polyurethanes, Nippon Polyurethane and SKC.
