<b>What is the next step for “Big Hei Niu” to polymerize MDI? </b>

<b>What is the next step for "Big Hei Niu" to polymerize MDI? </b>

Entering March, the domestic black material (polymeric MDI) market Prices extended last month's pullback. As of March 16, the mainstream distributors' offers have fallen back to around 24,500 yuan/ton. Compared with the market offer of around 26,500 yuan/ton on March 1, the callback range is around 2,000 yuan/ton. It is expected that the market price of aggregated MDI in China will fluctuate within a short period in the short term due to the positive and negative news intertwined and the psychological game between the supply and demand sides.

Good news:

1) Domestic mainstream manufacturers stabilize prices and support the market : Domestic mainstream manufacturers such as Wanhua, BASF and Huntsman listed high prices in March, and Wanhua's payment price in mid-March remained stable at 26,000 yuan/ton. From this week to the end of this month, Shanghai Covestro's order price remained stable at 26,000 yuan/ton, without assessment. However, the price of raw materials such as pure benzene and aniline has risen recently, giving manufacturers of polymerized MDI a cost support.

2) Japanese and Korean manufacturers supply domestically Continuation of tension: South Korean manufacturers Kumho Mitsui and South Korea’s BASF’s MDI devices are both operating at reduced load this month; a Japanese plant has not fully recovered since the reduction in operation due to raw material supply problems in early February. According to the maintenance plan, it is expected that the tight supply to the domestic and other regional markets will continue from March to May. Recently, the aggregated MDI dollar market in many overseas regions and countries has remained stable, indirectly forming a weak support for the price of domestic aggregated MDI.

Bad:

1) Overshooting sequelae:Affected by the sharp increase in the price of polymeric MDI and other raw materials last month, the downstream manufacturers of hard foam, under the pressure of cost surges, cautiously pursued higher prices, and some rigid demands were also suppressed. After the price weakened, speculative profit-making in the market began to "bubble", actively shipped, and profited out, dragging down the overall market price range. Downstream manufacturers "don't buy up, don't buy up, don't buy into down", their willingness to follow up is becoming more passive, and the atmosphere in the trading market is deadlocked.

2) Global supply tension eased: The North American MDI installations affected by the cold wave have resumed operation since the end of last month, and the European MDI installations have been operating smoothly as a whole. BASF in Chongqing is shutting down for maintenance in China, and other manufacturers have no clear maintenance plan for the time being, and are operating normally. On the whole, the tight spot supply situation of manufacturers at home and abroad has eased compared with last month.

Comprehensive judgment:

Since the price increase in February was higher than the speed of demand recovery, this In the first half of the month, the domestic market showed an upside-down market of "the traditional peak season is not busy". At present, when the supply side news is light and the price is still at a high level, we expect that the market will still mainly digest the previous price increase in the near future. Under the game of the supply and demand sides and the pull of the counter force, the shocks are sorted out. During the shock process, downstream manufacturers simply need to find opportunities to replenish their positions at low prices, slowly consuming social inventory.

Uncertain factors still coexist in predicting the market outlook . For example, considering the financial pressure of some traders and the international environment such as repeated overseas epidemics, it will also be the influencing factors that make the price of black materials drop. Conversely, if during the price correction process, downstream manufacturers continue to follow up and the demand side opens up, it will also help the price of black materials in the market outlook to stabilize or even rise.

In summary, we believe that breaking the current stalemate atmosphere The key is still on the demand side.

Rationally look at callbacks, "Big Black Bull" aggregates MDI, In order to walk more steadily.