MDI Overview

MDI Facility Disruptions Resurface? China PMDI Market Review – April 2024

PUdaily | Updated: April 29, 2024

MDI Facility Disruptions Resurface? 

The MDI facility dynamics in North America are attracting market attentions. According to market sources, unplanned shutdowns have occurred at some North American MDI facilities, including BASF and Covestro. Their combined capacity contributes 44% of the total MDI capacity in North America. The impact on their supply and deliveries are under assessment. Before it, and in late March, BorsodChem Hungary declared force majeure on MDI products supply, which led to increasing PMDI exports from China to Europe in March. In March 2024, China exported 37 kT PMDI to Europe, a 345.1% increase from this February, according to China’s customs statistics. If excluding the factors related to Chinese New Year holiday, China’s PMDI exports to Europe in March increased by 62.2% compared to this January.

China PMDI Market Review – April 2024

As of April 26, 2024, the average price of spot PMDI goods in China is around CNY 16,438/tonne, showing a 0.5% increase compared to this March (CNY 16,350/tonne), according to PUdaily. In this month, Chinese PMDI market showed a trend of bottoming out. The PMDI market prices climbed gradually from CNY 15,700-16,300/tonne on April 1 to CNY 16,400-17,000/tonne on April 29. The increase trend was attributed by the supports both from supply and demand sides.

In terms of supply, The settlement prices from major PMDI suppliers were higher than market expectations; Covestro also increased its weekly contract prices to distributors week-by-week. All above provided strong support for the April market because the purchase costs from distributors and traders kept at relatively high levels. Major PMDI suppliers also reduced supplies to direct and/or indirect customers, alleviating ovearll sales pressures in distribution market. In terms of demand, the refrigerator and formaldehyde-free panel sectors continued their year-on-year growths in sales and outputs; following destocking measures, downstream manufacturers in construction sectors significantly increased their purchases for PMDI this month to gear up for the May Day holiday.

China PMDI Market Outlook – May 2024

In terms of supply, MDI facilities of BASF Shanghai and Wanhua Ningbo are scheduled to shut down for maintenance in this May, which may lead to supply allocations. In terms of demand, refrigerator, one of major PMDI downstream sectors, the production in May is forecasted to reach 8.5 million units, the highest level since the year of 2005, and will increase by 13.4% year-on-year, according to ChinaIOL.com. The robust demand provides a support for Chinese PMDI market.

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