Market Pulse: Polyols Led the PU Chain — and Prices Won't Fully Round-Trip

Crude closed the week at its weakest since before the Middle East conflict. But for anyone buying polyurethane, the more useful story isn't in the oil price — it's in the quiet way polyols outran isocyanates this year, and why the coming easing won't be a clean return to pre-war levels.

Crude closes the week at pre-war lows

Brent settled near $70 (WTI around $68), the lowest since late February, as Strait of Hormuz flows climbed back above 10 million barrels a day and Saudi exports recovered to roughly 90% of pre-war levels. The war-risk premium continues to bleed out. There is a counterweight, though: US crude stockpiles just fell to their lowest since March 2025 after twelve consecutive weekly draws, and US–Iran talks are paused around the early-July period. The trend is soft, but it isn't a one-way street.

Polyurethane: polyols were the hidden story

During the supply crunch, headlines fixated on MDI. Yet industry data and PUdaily reporting show the sharper move was in polyols. Because polyols were hit at the feedstock level — propylene-oxide (PO) constraints, including a major producer force majeure — the whole polyether chain tightened at once. The result: polyols climbed roughly 94% year-to-date, more than double the rise in TDI, with US grades reaching around $2,980–3,300/tonne by early May. Isocyanates rose too, but MDI in particular moved more gradually and in a more managed way through contracts and allocation.

The practical point for formulators: every polyurethane system needs both an isocyanate and a polyol in a fixed ratio, so a shock to either side bottlenecks the whole formulation. This year, the binding constraint was more often the polyol than the isocyanate — the opposite of what the MDI headlines suggested.

Why prices won't simply round-trip

As the war premium unwinds, the natural assumption is a return to pre-war pricing. That's unlikely, for structural reasons that sit underneath the geopolitics:

• Trade policy has reshaped MDI supply. US anti-dumping duties have effectively pushed Chinese MDI out of that market, with Hungary and Spain replacing only part of the lost volume — a narrower, more concentrated import base.
• TDI has a single-origin dependency. Import flows have concentrated heavily on one origin, which keeps a floor under price and adds supply risk.
• Capacity was lost before the war. European closures had already removed shock-absorption capacity, so there's less cushion to bring prices all the way back down.

Add it up and the likely path is: feedstock-driven polyols ease faster as PO normalises, while MDI and TDI settle onto a structurally higher floor than before the conflict. Normalisation, not a full reversal.

What it means for buyers

The easing is real, but "cheap" isn't returning everywhere at the same speed. For buyers of polyurethane feedstocks, that argues for two different tactics on the two halves of the system: ride the softening on polyols (and on vinyls and plasticizers, where crude relief is flowing through), but on structurally tight MDI and TDI, lock in volume when you see genuine value rather than waiting for a full round-trip that may not come. For the difference between the two isocyanates and where each is used, see our guide to TDI vs MDI.

What to watch next week: OPEC+ signals and the resumption of US–Iran talks, and — most tellingly for PU buyers — the first polyol offers to retrace, which will show how much of the premium was temporary versus structural.

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