Chinese MDI Overview

China MDI Market Review 2023

PUdaily | Updated: January 19, 2024

China MDI Market Review 2023

In 2023, China MDI market experienced periods of downturn followed by rebound, with a narrowing price range. The yearly PMDI price was CNY 15,808/tonne, dropped by 8.3% year-on-year. The yearly MMDI price was CNY 19,991/tonne, dropped by 3.8% year-on-year. Despite both PMDI price and MMDI price dropped, the overall trend of “downturn followed by rebound” throughout the year reflects a gradual recovery in China MDI market.

In the first two months of 2023, MDI facilities in Ningbo and Chongqing underwent maintenance, leading to a significant decrease in operating rates. Suppliers either reduced supply or controlled deliveries. Additionally, due to the anticipated recovery of domestic demand from March, suppliers increased their guide prices and traders followed suit. From March to May, facilities undergoing maintenance gradually resumed production, but demand recovery fell short of expectations. Construction was under pressure due to the real estate downturn and macroeconomic factors. Major downstream sectors of MMDI such as spandex saw decreased operating rates, as did PU resin for shoe sole and PU resin for synthetic leather. The momentum for price increases in the MDI market weakened and experienced a pullback. From June to August, the news of maintenance from suppliers in Shanghai, Yantai, and Ruian drove a resurgence and stabilization in the MDI market. Meanwhile, the shipments of PU panels  increased compared to the previous months. Operating rates of TPU and spandex, downstream sectors of MMDI, saw increases, expanding demand for MDI. However, from October to December, as the off-season for downstream industries such as building insulation arrived, the MDI market once again weakened and moved at a low level.

China’s MDI Output Amounted to 4 Million Tonnes, Up 12% YoY; MDI Demand Totaled 3.15 Million Tonnes, Up 14% YoY.

In 2023, China’s MDI output amounted to around 4 million tonnes, increased by 12% year-on-year, with an average operating rate of 91%. Wanhua Chemical’s 400 ktpa MDI facility in Fujian, which commenced operations at the end of 2022, effectively utilized its capacity within the year. Meanwhile, China’s MDI demand showed a restorative growth. In 2023, MDI demand in China totaled around 3.15 million tonnes, representing a 14% year-on-year increase, significantly outpacing China’s GDP growth rate (5.2%). The downstream industries of PMDI that displayed significant growth included refrigerators, PU panels, and formaldehyde-free panels (woodbinder). In the downstream industries of MMDI, spandex and TPU showed demand growth rates higher than the overall level. In the automobile industry, the continual penetration of EVs, along with the increasing use of polyurethane in such vehicles as compared to traditional FVs, collectively drove the per-vehicle consumption of MDI and the overall MDI consumption in the industry.

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