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June 21, 2017 02:00 AM

High diisocyanate prices could slow polyurethane growth

Urethanes Technology International
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    LONDON—The sustained high and rising prices of diisocyanates could affect the future growth of the global polyurethane industry, three key players warn.

    In telephone conversations on 19 and 20 June, spokesmen for Recticel, Vita Cellular Foams and Foam Partner all confirmed that clients are looking for cheaper alternatives to polyurethane in existing and new products where they are available.

    Diphenylmethane diisocyanate (MDI) and toluene diisocyanate (TDI) have been tight for some time and prices have been rising consistently for between 16 and 18 months, the firms said, and added that product has been on allocation, in relatively well-supplied Europe.

    "The rise is completely unprecedented in amplitude and speed," Recticel Managing Director Olivier Chapelle said.

    All the companies interviewed could supply customers during this time by using the spot market to make up for shortfalls of diisocyanate as their suppliers allocate production.

    "We've been back in our records," said Jon Cheele, managing director, United Kingdom, at Vita Cellular Foams. "We've never seen anything like this duration. We've seen these quantum of increases, but we've never seen these absolute prices before. We have found six-month spikes, six-month drops but nothing goes over a year."

    He added that product specifications are changing, people are using less dense foam where possible or switching to other materials sometimes in an emotional response to the relentless price increases.

    "What worries me most of all is that the industry supplies a lot of entrepreneurial furniture and bedding manufacturers, many of whom have just had enough and are saying after the fifth or sixth increase that 'We are sick to the back teeth of this,' " Cheele said.

    Chappelle said his firm has had to regretfully pass on prices to its customers as forcibly as they are being passed on to it.

    There is a very real potential risk now that the high prices for isocyanate will begin to harm the future growth of the industry, Cheele added.

    "Customers in different segments are working on substituting polyurethane for materials with less volatility," Chapelle said. "They cannot afford this volatility."

    The trend will become clearer when consumer industries introduce new products which are currently made using polyurethanes, which could gradually harm the industry as customers migrate to polyurethane alternatives, FoamPartner CEO Bart ten Brink said.

    "It's not the price increases, it's availability and the long lead times," he said. "(Our customers) consider PU to be a less trustworthy material than before while the supply along the value chain is not guaranteed or secured. In the mattress market, people are moving away from PU towards box springs and latex again. It's hurting."

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