Market Sentiment: Temporary Improvement Fades
The Middle East polyurethane market saw a brief improvement in activity following the early-April pause in regional tensions, with some limited movement observed in trading. However, this recovery has proven fragile, as market participants remain cautious amid ongoing uncertainty. As a result, the initial improvement in sentiment has not translated into a meaningful rebound in supply or liquidity, with most players adopting a wait-and-see approach.
Supply Conditions: Structural Tightness Intensifies
Supply conditions remain the dominant driver of the market. Key regional production, particularly from major facilities in Saudi Arabia, is still reported to be offline with no clear timeline for resumption. This has significantly reduced available volumes across MDI and polyol segments. At the same time, logistical constraints continue to disrupt distribution flows, with shipments from major hubs such as Jubail facing severe challenges. Regional inventories have already been drawn down, and alternative supply sources remain limited, further reinforcing the tightness in the market.
Price Dynamics: Shortage-Driven Volatility
Price levels across the polyurethane value chain continue to reflect the prolonged supply tightness observed over the past month. With production disruptions and limited material availability persisting, the volume of product circulating in the market has been significantly reduced. As a result, even small volumes traded in the spot market are exerting a disproportionate impact on pricing.
In particular, TDI has experienced the most pronounced upward pressure due to acute shortages, while MDI and polyol segments are also firming under constrained supply. In some cases, transaction levels have reached relatively elevated or "extreme" values, driven more by scarcity than by underlying market fundamentals. These price points do not always fully represent the broader market, but rather reflect isolated trades in an environment where availability remains highly limited.
Market Outlook: Gradual and Uncertain Recovery
Looking ahead, any recovery in the Middle East PU market is expected to be gradual. Even as some trading activity begins to return, the normalization of supply will depend on the restoration of production and improvement in logistics rather than short-term changes in sentiment. In this context, the market is likely to remain tight in the near term, with pricing supported by supply-side constraints and cautious supplier participation.
Looking ahead, there are early indications that some supply-side activity could gradually return in the coming weeks, potentially bringing a slight improvement in product availability. However, this remains highly uncertain, and any recovery is expected to be slow and uneven rather than immediate.