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Analysis of MDI market trends in 2021

Analysis of MDI market trends in 2021
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  • Categories:Industry news
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  • Time of issue:2021-02-08 11:44
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(Summary description)

Analysis of MDI market trends in 2021
Top

(Summary description)

  • Categories:Industry news
  • Author:
  • Origin:
  • Time of issue:2021-02-08 11:44
  • Views:
Information

In 2020, the MDI market as a whole presents a trend of high after low. In the second half of the year, boosted by frequent maintenance of domestic and foreign devices, the market keeps fluctuating upward. The annual difference between the lowest price and the highest price is about 13,500 yuan (ton price, the same below), with an amplitude of about 120%.
Wanhua MDI product price trend in 2020
Review in 2020
◆◆It shows an inverted "V" trend◆◆

The overall MDI market will show an inverted "V" trend in 2020. In the first half of the year, the epidemic made it difficult for refrigerator and refrigerator enterprises in the downstream thermal insulation industry of MDI to resume work and outdoor thermal insulation projects to be carried out, resulting in further imbalance in the market with loose supply. Thus, MDI began a long road of decline.

Pan Jinsong, professor-level senior engineer at Shandong Institute of Industry and Information Technology: The refrigerators, freezers and other industries downstream of MDI are very dependent on exports. Consumption of polymerized MDI declined as the outbreak blocked export routes, and downstream factories routinely canceled or delayed orders and stopped work as soon as work resumed. In terms of output, China's MDI output in the first half of 2020 totaled 793,000 tons, a decrease of about 35.9% compared with the same period last year. Although production control measures have been taken, the MDI price is still at a low level due to low demand.

The market for MDI began to change in August. Demand recovered modestly as the outbreak was brought under control. Especially in October, factories at home and abroad started to be overhauled successively, and Dow and Huntsman plants were shut down one after another. Huntsman's unit was scheduled for annual maintenance, while Dow's U.S. unit was shut down due to force majeure caused by the hurricane. The news had an impact on the market and the orders quickly disappeared

. Subsequently, Huntsman Corporation of the United States and Tinco Corporation of Japan also declared force majeure, MDI began to enter the intensive maintenance period of the device worldwide, the factory increased its support, the market once again showed a straight line rising momentum, the price of MDI rose continuously, reached the year's high of 24,100 yuan at the end of October. In November, the MDI market was sharply reduced, and the price fell to the support level of 17,000 yuan and then rose, and then ran to around 18,000 yuan, ending with a small carry-over market.

  Outlook 2021 
◆◆Market pressure ahead capacity continued to release◆◆

Meng Xianxing, Vice President of Shandong Chemical Industry Research Institute: As an industry with high industrial concentration, there will still be new capacity released in the MDI market in the future, and the contradiction between supply and demand may worsen.

In 2020, the MDI capacity of Wanhua Yantai plant will increase from 600,000 tons/year to 1.1 million tons/year, which is expected to reach production in 2021. Shanghai Lianheng has increased its MDI capacity from 240,000 tons/year to 480,000 tons/year, which is also expected to reach production in 2021. In addition, Wanhua Fujian Plant is building a 400,000-ton/year MDI unit, which is expected to be put into production in 2023. Xinjiang Juli plans to build a 400,000 tons/year MDI project, which is expected to be put into production within 3 years.

If the above capacity is released as expected, we can expect the MDI market to be under pressure. In terms of import and export, in the first 11 months of 2020, MDI imports totaled about 341,900 tons, up 22.8% year on year, while exports totaled 544,000 tons, down 7.6% year on year. The domestic MDI price in 2020 is significantly higher than that in 2019, which also gives the opportunity for imported goods to enter the Chinese market.

If the MDI market goes up significantly in 2021, a large number of imports will continue to flood into China, which may have a negative impact on the MDI market.

◆◆Demand is expected to be good◆◆

Li Hong, Marketing Manager of Shandong Zhonghai Chemical Group Co., Ltd. : From the perspective of downstream polyether, the new production capacity of polyether will be 1.235 million tons/year in 2021, and the total production capacity of polyether will reach 7.468 million tons/year by the end of 2021, which is expected to drive the increase in the demand for raw material MDI.

In addition, the signing of the RCEP is a major boon for the refrigerator industry. In the first three quarters of 2020, China exported more than 7.3 million refrigerators and freezers to RECP member countries, accounting for nearly 16% of global exports. The implementation of the agreement will create a better regional business environment and create some space for China's home appliance exports. From the perspective of domestic demand, the current refrigerator industry inventory is low, the construction is booming, and the demand for MDI continues to improve.

In addition, the signing of the RCEP is also extremely beneficial for another important downstream furniture market of polyurethane. As a large country of furniture production, furniture exports account for a large proportion. When RCEP begins to operate, China's furniture exports in these regions are expected to increase.

But the impact of the 2021 outbreak cannot be ignored, and exports may be blocked. In addition, the United States has imposed economic sanctions on China, which has brought great challenges to the downstream, especially the industrial layout of terminal mattress products, and thus is bad for the MDI market.

 

来源:中国化工报

 

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