Simultaneous North American MDI Force Majeures Squeeze Polyurethane Sourcing Costs
Coinciding MDI plant disruptions in North America reduce global production and force buyers to seek alternative supply routes.
Briefing
In May 2026, Covestro and Dow Chemical declared force majeure after major disruptions hit their North American diphenylmethane diisocyanate plants. The chemical serves as the primary feedstock for polyurethane foams, industrial coatings, and sealants. The simultaneous outages choked off regional availability almost immediately, forcing industrial buyers into competition for thin spot volumes.
Procurement desks that cannot secure alternative import streams face protracted delivery delays. Combined, the shutdowns idled approximately 1.94 million tons of global production capacity.
Context
Up until the declarations, procurement teams had been occupied mainly with negotiating price discounts, working under the assumption that supply would remain steady and costs would drift downward. The central decision for buying desks had been whether to commit to long-term supply agreements or lean on the spot market to capture further price declines.
Analysis
The shutdowns followed sudden breaks in regional supply chains for carbon monoxide and chlorine, the core precursors for diphenylmethane diisocyanate. Because these hazardous gases cannot easily be stockpiled, synthesis units have to trip offline the moment pipeline delivery stops. The disruption cascaded down the chain within days: with both producers holding such significant regional market share, domestic spot inventory disappeared almost at once.
Sourcing teams are now dealing with higher baseline pricing, quote validities cut to hours, and strict allocation rationing in place of open order books.
Parameters
- Global Idled MDI Capacity ~ 1.94 million tons of production capacity are offline, representing 20% of the global total.
- North American Supplier Concentration ~ Five major companies control 95% of the regional MDI market.
- Sourcing Region ~ North American plants operated by Covestro and Dow Chemical are the affected locations.
Outlook
Elevated polyurethane prices and extended lead times are set to persist through the end of 2026. Purchasing desks will need to track upstream carbon monoxide and chlorine suppliers closely, since restarts at those local facilities will dictate when raw feedstocks return and MDI production can resume.
Verdict
Polyurethane procurement must pivot to secure imported alternative resins and lock in contracted volumes before domestic spot inventories are completely exhausted.