News and Articles

• MDI and TDI supply stayed tight as demand grew faster than expected.
• Higher isocyanate costs compressed polyurethane producer margins.
• TDI prices were broadly stable with regional supply-demand swings.
• The MDI, TDI and polyurethane market neared $81 billion in 2026.
• Tight supply raises the risk of finished-product price increases.

Polyurethane producers stayed under cost pressure through late May 2026 as MDI and TDI supply remained tight while demand grew faster than expected. The squeeze came from isocyanate raw materials, where higher prices compressed margins for foam, coatings and elastomer makers who could not raise finished prices fast enough to match rising input costs. The result is a market where converters absorb much of the cost increase rather than passing it through cleanly.

The supply side has been the main problem. The market for MDI and TDI faced persistent shortages even as demand from construction, furniture, bedding and automotive applications kept growing. When demand outpaces available supply, isocyanate producers gain pricing power, and that has fed straight into the cost base for polyurethane systems. TDI prices were broadly stable across 2026 with regional swings, as some areas saw declines on weak demand while others firmed on limited supply.

The broader market continued to expand, with MDI, TDI and polyurethane sales estimated near $81 billion in 2026, up from about $78 billion the prior year. That growth reflects steady end-use demand across insulation, cushioning and coatings, but it also adds to the strain on supply when isocyanate capacity cannot keep pace. Raw material volatility, supply tightness and demand running ahead of availability have defined conditions through the year.

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For procurement teams, the combination of tight isocyanate supply and firm demand argues for securing volumes early rather than relying on spot purchases. Polyurethane buyers in construction, furniture and transport face the prospect of higher system costs as long as MDI and TDI stay tight, and those exposed to spot isocyanate pricing carry the most risk. The pressure on converter margins also raises the chance of finished-product price increases later, as makers try to recover squeezed margins.

The practical step is to track MDI and TDI pricing and operating rates closely, since those inputs set the direction for polyurethane costs. Buyers should review contract terms for raw material pass-through and consider qualifying multiple suppliers to reduce exposure to regional shortages. Watching construction and automotive demand indicators gives a read on how long the demand strength might persist, while isocyanate plant availability signals when supply tightness could ease. With demand outpacing supply and raw materials volatile, polyurethane buyers should plan for firm to rising costs and limited near-term relief.