The global isocyanates market endured another difficult year in 2025, with MDI and TDI producers continuing to face weak demand, high operating costs, and limited visibility across key end-use sectors. Despite occasional periods of tighter supply caused by maintenance outages or trade disruptions, market fundamentals remained fragile. Activity in the construction, automotive, and furniture industries stayed below expectations, and most market participants described overall conditions as flat to soft. As the year closes, there is little sign of a meaningful turnaround, with 2026 MDI and TDI markets now expected to bring only a slow and uneven improvement at best.
Global demand for isocyanates failed to recover in 2025, with buyers remaining cautious and largely purchasing only to meet immediate needs. Operating rates across major producing regions averaged around 75–80 percent, as producers worked to manage persistent oversupply.
Europe remained the most pressured region, hit by subdued economic growth, high energy costs, and competition from low-priced Asian imports that continued to erode margins. Construction and automotive activity remained disappointing, and restocking was minimal even during the typical summer peak.
In the United States, market conditions for MDI and TDI remained similarly subdued. A temporary reduction in tariffs between the United States and China in mid-2025 created brief optimism, but the effects proved short-lived. Demand from the construction and automotive sectors remained below historical averages, as high borrowing costs and inflation discouraged new investment. MDI and TDI prices remained largely stable but showed few signs of meaningful improvement. While the broader U.S. economy avoided deeper contraction, the polyurethane sector saw little spillover benefit, and expectations for 2026 remain muted.
Tariff developments, which had dominated concerns earlier in the decade, had a limited direct impact on MDI and TDI market conditions in 2025. The temporary suspension of certain trade measures helped maintain supply stability and eased logistical pressures, but it did not translate into stronger demand or higher prices.
In China, the MDI and TDI market fluctuated as producers attempted to balance weak domestic consumption with reduced export opportunities. Output discipline created brief periods of price stability, but oversupply persisted—particularly for MDI. Downstream sectors such as coatings, TPU, and footwear offered little relief, and market sentiment remained subdued. While production efficiency has improved, sluggish consumption both at home and abroad continues to weigh on the market.
The outlook for 2026 remains cautious. Demand is likely to stay subdued across key sectors, with only limited improvement expected in construction and automotive activity during the second half of the year. MDI and TDI prices are forecast to remain largely stable, with any upward movement driven more by supply-side adjustments than by stronger consumption. Producers are expected to maintain conservative operating rates and focus on cost control and efficiency as industry consolidation continues. Overall, 2026 is set to be another year of stabilization rather than a strong recovery for the global isocyanates industry.