The Chinese MDI Market Showed a Reverse N-Shaped Trend in May 2017

In May, the Chinese average price of polymeric MDI was RMB 21,671/mt, which fell 6.85% M-O-M, and rose 73.84% Y-O-Y. The Chinese MDI market fluctuated in May. At the early May, the MDI prices went down to the bottom. In the mid-May, the price increased significantly, while it decreased slightly in late May. Up to May 31, the mainstream negotiation prices for MDI were in the range of RMB 21,500-22,300/mt. The prices mentioned above are delivered prices or self-delivery price with VAT.

The Chinese MDI market continued to decrease.

In mid-May, though Tosoh (Ruian) Polyurethane restarted its 80kt/a unit, the overall supply was still tight as the 800kt/a unit at Wanhua Chemical (Ningbo) started to undergo maintenance and the 350kt/a unit at Shanghai Lianheng was undergoing maintenance. Furthermore, Covestro Shanghai stopped selling goods to the market, and the import of MDI from Japan and South Korea was few, the supply was tight in the spot market. Traders’ inventory was at a low level, and the market was full of bullish sentiments. The downstream demand was on a need-to basis, but the mainstream negotiation prices went up greatly.

In late May, as Covestro Shanghai started to sell goods, the tight supply in the spot market eased. However, the refrigerator industry entered the off-season, and demand of environmental exterior wall and piping insulation industry was weak. Thus, the market prices fluctuated and the mainstream negotiation prices decreased slightly. At the end of May, the Chinese MDI unsettled price in June maintained the same level as it in May. It is predicted that the MDI market will continue to decrease in the future.