U.S. housing starts rose in April, with construction of single-family and multi-family homes accelerating, further signs that the residential real estate market is gradually recovering. Official data, the number of new housing starts in April was 1.401 million units, an increase of 2.2% from the previous month. Compared with 1.35 million units in December at the end of 2022, market demand is growing steadily. The number of housing completions in April was 1.375 million units, a narrow decline from the previous month, but the total completions from January to April 2023 increased by 9.7% year-on-year, which further proves that the US real estate market is growing steadily.
Figure 1: US housing starts and housing completions from April 2022 to April 2023 (10,000 sets)
Data source: Federal Reserve Bank of the United States
Builders are taking advantage of a shortage of existing homes to ramp up construction of new homes, and some are offering homebuyers financing breaks to ease housing prices amid buoyant demand for new homes. It also helped homebuilder sentiment hit a 10-month high.
Figure 2:2022From May to May 2023U.S. Homebuilder Confidence Index
Data source: National Association of Home Builders
As an important downstream industry of the real estate industry, building insulation requires a large amount of polymerized MDI as insulation raw materials. Therefore, the recovery of the US housing market has had a positive impact on the demand for polymeric MDI in China, making China one of the main sources of supply of polymeric MDI in the US. According to the data released by the General Administration of Customs of China, from April 2022 to April 2023, the amount of aggregated MDI exported from China to the United States also showed certain fluctuations. For example, exports fell from 32,869 tons in June 2022 to 6,749 tons in December 2022 and then reached 27,380 tons in April 2023. This volatility reflects the changes in the US market’s demand for China’s polymeric MDI. Starting from 2023, the US’s demand for China’s polymeric MDI will gradually increase, slowly getting rid of the decline in the second half of 2022.
Figure 3: Total aggregated MDI imported from China by the US from April 2022 to April 2023 Quantity (tons)
Data source: General Administration of Customs of China
To sum up, by analyzing the aggregated MDI data exported from China to the United States, we can further prove the steady recovery of the US market and the important position of China’s aggregated MDI in the US market In the future, the demand for real estate in the United States may gradually recover, and the demand for building insulation will also increase simultaneously.
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