Wanhua IPDI Shutdown Impacts Market

PUdaily, Shanghai– 2017 has come to an end. During the year, most raw materials for polyurethane “rose dramatically”, astonishing many mark participants. The price of many raw materials exceeded the 2016 peak, reaching a new high that has not been seen in the last five years. Next, PUdaily will present a review of the IPDI price movement in 2017.

In 2017, the IPDI price remained high at between 60,000 and 88,000 RMB/ton, with the lowest price in June and the highest in October.

The average price for IPDI was about 71,735 RMB/ton, up about 1,819 RMB/ton from 2016 and the highest in the last five years. 

Note: the price is the average price of 4 companies’ IPDI between January and December, including Covestro, Evonik, Vencorex and Wanhua Chemical.

In the first half of 2017, with the increase in supply of Wanhua Chemical’s IPDI, the competition became fiercer and the marketplace became more fragmented. The domestic IPDI market turned into a turbulent market from a steady one, with the price fluctuation becoming more frequent than previous years. At the beginning of the year, the market opened at 71,300 RMB/ton, but closed at 62,700 RMB/ton in the mid-year, down 8600 RMB/ton, or 12.1%.

Into the second half of the year, the market trend saw a swift change as market participants became pessimistic about the traditional off season of July and August. A slow upward movement began, which gave participants a big surprise. In late July, Wanhua Chemical’s IPDI facilities were shut down due to inadequate supply of raw materials and announced that production would not be resumed in short term. Then the market began to pick up. At the end of August, due to the impact of hurricane “Harvey” on its facilities in Baytown and Channelview, Texas, Covestro declared force majeure on the supply of IPDI and derivatives to markets in North America. Added to the dealers’ originally low level of inventories was that they could not get sufficient supply due to the shutdown of Wanhua Chemical and Covestro’s facilities. Into September, the inventories in the market became scarce because the inventories of dealers and downstream manufacturers began to deplete. The dealers began to stop selling. As a result, the supply of goods in the market became even more limited, leading to increasingly higher offers. In October, the price for IPDI hit a record high that has never been seen in recent years. In November, with the addition of imported goods and sluggish demand, the price set on a downward trajectory. Into December, as some dealers sold off goods for return of capitals, the price dropped at a faster pace, with a IPDI price of between 72,000 and 75,000 RMB/ton seen at the end of the year.

For more details, please refer to 2017 China’s IPDI Market Report. As an observer and participant in the industry, PUdaily will offer you our annual report—2017 China’s IPDI Market Report, in which we will analyze the status quo of China’s IPDI industry in 2017 and forecast its development in the coming years from a third-party perspective. We always aim to help our new and old customers properly plan the future and do business in a more effective way. If you have different opinions, please feel free to leave a message or contact PUdaily for discussion via mobile phone 18221824746!

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