MDI and TDI Market Outlook 2026: Supply Disruptions Meet Weak Demand

Regional outages and logistics disruption tightened MDI and TDI supply in H1 2026, while weak downstream demand kept buyers focused on immediate needs.

Key Takeaways

• US MDI supply tightened because of force majeure, maintenance and reduced Chinese import availability.
• The shutdown of Sadara’s Al Jubail complex reduced exports into Europe.
• Construction, furniture, bedding, automotive and other durable-goods sectors underperformed.

MDI: The US Remained More Constrained

US MDI supply tightened because of force majeure, maintenance and reduced Chinese import availability. Covestro’s Baytown disruption, Huntsman’s Geismar turnaround and BASF maintenance progressively reduced flexibility. Europe also received cost and supply support in Q2, but persistently weak construction, furniture and automotive demand allowed conditions to soften toward mid-year.

TDI: Logistics Disruption Had A More Direct Impact

The shutdown of Sadara’s Al Jubail complex reduced exports into Europe. Shipping disruption through the Strait of Hormuz, higher freight and insurance costs and force majeure declarations across parts of Asia-Pacific further restricted availability. Europe tightened through Q2 before improving imports restored a more balanced market by late June.

Demand Remained the Limiting Factor

Construction, furniture, bedding, automotive and other durable-goods sectors underperformed. Even when supply was tight, buyers generally limited purchases to immediate requirements because of high financing costs and uncertainty around end-use demand.

Trade Flows Became Less Flexible

European buyers sought alternative suppliers as Middle Eastern exports declined. US buyers relied more heavily on domestic production and non-Chinese imports as outages and trade measures reduced Chinese MDI availability. Longer lead times made both markets more vulnerable to disruption.

H2 Outlook

US MDI is expected to remain firmer than Europe, while TDI should be more balanced in both regions. Renewed Middle East disruption, additional production outages, Gulf Coast hurricane activity and volatility in feedstock, freight and insurance costs remain the principal risks.