On July 24th, the editor of Tiantian published an article “Looking at the Future Market Trend of Domestic MDI Prices from the Recent European Market”. The market price of domestic MDI rose accordingly, confirming the channel of price strengthening. Let’s start by reviewing the MDI price action during this time period.
Data source: Tiantian Chemical Industry Network
It can be seen from the above chart that in the last ten days, the market price of aggregated MDI has risen sharply, with an increase of 14%. The price of pure MDI also stopped falling and rose by an average of about 3.5%.
Aggregate MDI:First of all, let us look at the price of aggregate MDI that everyone is generally concerned about. The factors supporting the sharp increase in the price of polymeric MDI this time are that from the perspective of the supply side, domestic mainstream MDI manufacturers have raised the listing price of polymeric MDI in August, with an increase of 1,000 yuan/ton or more. This morning, the market learned that a poly-MDI factory in Shanghai continued to close the distribution market this week. This is the second consecutive week since the manufacturer’s European factory equipment was shut down due to force majeure. Affected by this, the manufacturer’s distributors are short of inventory. In addition, the market price of polymeric MDI is on the rise recently. Wanhua’s distributors are also facing the shortage of manufacturers’ supply. According to market reports, this month Wanhua has adopted a 20% discount for its distribution channels, and the settlement price has also been raised to 13,800 yuan/ton. Therefore, PM200 distributors also adopt the mentality of “reluctant to sell and bullish”. In short, the bullish atmosphere in the market has continued to ferment.
Pure MDI: Compared with aggregated MDI, the price of pure MDI is also affected by this wave of market news in late July Stabilized and rebounded, although the increase in the past ten days was relatively small, but the market holders also held the idea of continuing to increase. This idea is also supported. On the one hand, domestic mainstream manufacturers of pure MDI have also raised the listing price of pure MDI in August, and the price protection has supported the market. On the other hand, there is no shortage of possibilities for domestic MDI manufacturers to increase supply to overseas markets, so there is a trend of tight supply to the domestic distribution market.
MDI-50:Recently, due to insufficient supply of MDI-50, Wanhua Chemical has raised the buy-it-all price of its MDI-50 to 23,000 yuan/ tons, an increase of 2,000 yuan/ton from the previous month. In addition, I also learned from a manufacturer in Shanghai and a distributor of MDI-50 from a Korean manufacturer that the general situation is that there are few stocks available for sale. Judging from the current situation, there is still a possibility that the market outlook will continue to increase, which makes the holders more cautious and reluctant to sell.
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