Monthly TDI Market: Chinese TDI Market Fluctuated Down in May 2017

The Chinese TDI market was downward in May. In early May, TDI prices declined passively and the supply was slightly tight at that time.

Then, Chinese TDI producers intensively raised ex-works prices. Furthermore, units in Covestro and Fujian Southeast Electrochemical were shut unexpectedly. Considering the supply, the inquiry interest moved up and the downstream demand improved slightly.

The sponge industry will enter the off season after May. Also, its operating rate is around 60%, because of environmental protection, financing and new orders. Therefore, the demand for TDI was low and the prices in the market were flexible.

In H2 May, the mainstream quotations for TDI decreased. Before and after the Dragon Boat Festival, the overall trading was thin and limited orders were in small amount.

Up to May 31, the mainstream negotiation price of domestic TDI in East China was RMB 25,200/mt, which fell 7.01% M-O-M. The negotiated price of Shanghai TDI was RMB 25,800/mt, which fell 5.15% M-O-M.

In the short-term, the TDI market will be stable based on rigid demand and unit maintenance. Moreover, most downstream industries of TDI are in off-season. And farming seasons will influence the operating rate to some degree. Therefore, the Chinese TDI market may slide in the long term.