The Urethane Blog

Chinese MDI Market Overview

Glance at MDI Market of H1 of 2016
2016-07-19    [Source:PUdaily]

 PUdaily, Shanghai-On Polymeric MDI Market

In early 2016, the price of polymeric MDI continues to decrease to about RMB 9,000/ton. In March, most suppliers begin to increase list prices and limit deliveries to boost the market because the prices are close to the cost. However, the market resumes uptrend because of firm price and supply limitation policy executed by plants, added with the upcoming peak season of downstream sectors regardless of the slight downward trend under bearish mood in market in mid-March. And the quotation soars to above RMB 12,000/ton in April because of tight supply caused by maintenance of Shanghai plants and the accidental shut-down of Chongqing plants. But the price moves down as the market enters into the fatigue period after mid-May. Though suppliers try to hike the price in June, the market still shows downtrend after short struggle because of the end of boom season of rigid foams from downstream industries.

Most manufacturers have reached a tacit agreement on operation strategy of this year – profit is the first, and firmness on the price in spite of less delivery, because of the poor business performance of most suppliers in last year caused by bad market situation. The growth rate of price is limited as total demand of downstream is similar with that of last year and the purchase demands of downstream customers reduce for big cost pressure after price has reached at a certain level affected by poor national economy. At last, the price of next six months may not be as strong as that of last six months, and in September, the price may move up because of the tight supply influenced by G20 summit. In addition, market may runs weakly in the rest of next six months, but it is predicted that the price decline may be smaller than that of last year as a result of the reforms in operation strategies of suppliers.

On Pure MDI Market

Domestic pure MDI market keeps rebounding during the first six months of 2016. During January and February, the market mainly remains range bound. After entering into March, the price continues going on upward pathway because of the price increment from suppliers, added with more and more demand in PU resin, source liquid of shoe soles and TPU etc. that start to step into peak season. However, after June, the price begins to decrease due to lower demand when come the end of production peak season in downstream industries.

Compared to the general downtrend of last year, pure MDI shows rare uptrend in the first six months of this year. Nevertheless, the overall price increase range in pure MDI is smaller than that of polymeric MDI for there is only small percentage of pure MDI in the distribution market and its small price fluctuations. It is predicted that pure MDI market will run stable-to-weak in the light of limited growth rate of downstream demand in this year.