Toluene diisocyanate

Toluene diisocyanate Global Market Outlook

• The global TDI market is expected to grow at a CAGR of 4.7 percent from 2022 until 2025, driven by a healthy downstream demand for derivatives polyurethane foams, elastomers and coatings for the use in the automotive seats, mattresses, carpet underlay, etc.

• Polyurethane foam to drive TDI demand: Demand of about 90 percent of TDI is used in making polyurethane foams and household products, due to increased construction activities in Southeast Asia

TDI Global Capacity–Demand Analysis

• Asia to drive the TDI market: The global demand of TDI is expected to grow at a CAGR of approx. 4.7 percent, mostly, driven by the rising demand for solvents, fuel additives, and downstream derivatives polyurethane in Asia. No capacity addition is expected during 2022–2025, in any of the plants globally

• The global TDI market in 2022 is expected to be normal, as the European region pushes its excess TDI through export, as it faced stringent import/export regulations from China because of its Dual control policy from October 2021 and low production rate, due to Hurricane Ida

Industry Drivers and Constraints : Toluene diisocyanate

• Demand for foam products, like automotive and construction in the Asian region, and automotive and household segments, like furniture, paints & coatings and packaging, is expected to drive the demand for TDI for the next 3–4 years

• Surge in crude oil prices is the major constraints for TDI in the global market, as it increases the overall feedstock prices and the price of end product

Drivers

Growth in automotive industries

• A major demand growth for TDI is expected to come from nylon-based industries, due to the increasing demand from the Asian automotive segment

Firm demand from the mature markets

• The Asian region that attracts the TDI market in construction and automotive industry, as its population is driving those segment because of improved disposable incomes. North America and EU, which consumes TDI mainly for the household products, are expected to have a steady demand, due to relaxation of lockdown restrictions

Polyurethane margins

• TDI is converted on-purpose to polyurethane. Polyurethane foams are used in making the end products in seats, paints and coatings.This conversion is done only when the margins between these two products are above $350

Constraints

Environmental regulations

• Concern towards environment is increasing and the chemicals released in atmosphere eventually pollutes the until the lower layer of stratosphere. Government frames regulates and imposes regulatory mechanisms to reduces the aerosol emissions into the atmosphere during the production process of TDI and MDI

Toluene margins

• Witnessing a declining trend in the toluene market has a positive effect on its market. Processed commercial-based toluene and nitration of toluene determines the higher utilization rate of toluene in the market

No capacity addition

• There is no planned capacity additions in any of the plants for TDI in the next five years

Cost Structure Analysis : Toluene diisocyanate

• Raw material prices are high in all the three regions, as its highly dependent on crude oil and its derivatives, like toluene, benzene and nitric acid, but it is anticipated to decline in the near future, as the oversupplied European region exports to other region, especially the Asian region, which is in high demand of TDI end products in automotive and construction segments. This positions the Asian players at an advantage in the global market, due to competitive pricing and so, Asia will grow as a best-cost-sourcing destination for polyurethane market in the next five years.

• Toluene, nitric acid prices are key indicator to end price of TDI products: Raw material costs are the key factors that influence the cost of TDI production. Regional energy cost is critical for arriving the cost of production

• Surging feedstock prices are the key indicators to the price rise of the end product. Still, the trade activities were less, due to trade restrictions and the US region had an electricity shortage, due to winter calamity. Still, the market can hold moderate cost, in terms of utility, labor and fixed cost