Mdi Has Gone Up Again! The Highest Soared 8200 Yuan/Ton!

Wanhua Chemical, Huntsman, BASF, etc. have all increased their prices, with the highest soaring RMB 8,200/ton!

Wanhua Chemical announced on the evening of October 27 that since November, the listing price of Wanhua Chemical’s China regional polymer MDI distribution market is 25,000 yuan/ton (up 5400 yuan/ton from the October price), and the direct market listing price is 25,000 yuan/ton. (Up 5400 yuan/ton from October price); listing price of pure MDI 28,000 yuan/ton (up 8200 yuan/ton from October price).

On October 26, Shanghai Huntsman’s November aggregate MDI listing price for the distribution market was 23,600 yuan/ton, an increase of 4,000 yuan/ton from the October listing. The supply is discounted and the right to adjust the price is reserved. In addition, the settlement price in October was 19,600 yuan/ton (acceptance price).

Recently, MDI has continued to rise, and many leading companies have been moving frequently.

On October 16, BASF announced that starting from November 1, 2020, or the time allowed by the contract, BASF will increase the price of all Lupranate MDI products by an increase of $0.13 per pound.

Starting on November 1, 2020 or when the contract allows, Tosoh will increase the price of its Millionate MDI products in the North American market by an increase of US$0.20/kg.

The overhaul has entered an intensive period, and force majeure occurs frequently

Since October, domestic and foreign factories will continue to undergo maintenance. Dow and Huntsman will stop during the holidays. Huntsman is annual routine maintenance, while Dow US installations will be shut down due to force majeure due to the impact of the hurricane. As soon as the news came out, it supported the market mentality, and the low prices quickly disappeared at the beginning of the month. Later in the week, Huntsman in the United States and Tosoh Japan also announced force majeure parking. Hanba, Kumho, and Shanghai Covestro also had maintenance plans in the month. Heavy trucks and Ningbo Wanhua also have maintenance plans in November and December.

Only the announced overhaul plan will last until December, which gave rise to concerns about further reductions in supply in the market outlook. Since July, the MDI factory has been implementing a controlled supply policy. The intensive maintenance of foreign installations at the end of July and early August has also given domestic factories a good opportunity to digest inventory. Therefore, the domestic market supply has been maintained at a relatively low position compared with the same period.

Domestic factory price operations are also direct support for the upward market price.

Wanhua: October listing price is 19,600 yuan/ton, 1-10 settlement is 18,800 yuan, 20% off supply; 11-20 settlement is 19,600 yuan/ton, delivery is delayed; 21-31 no quotation for the distribution market, no single.

Covestro: In the first week after the holiday, the distribution market price was implemented at 18,000 yuan/ton. Later, due to the incremental supply in the export direction, the distribution direction gradually stopped receiving new orders, and the pre-contract customers placed orders for supply.

BASF: Within the month, the direct supply price was raised to 22,500 yuan/ton, and then the listing price in the distribution market was raised to 22,000 yuan/ton, and new orders were also stopped.

Huntsman: The equipment was overhauled. The original supply was tight, and there is no fluctuation in subsequent prices.

Tosoh Ruian: It played a relatively important role in this price increase. Originally, the two factories of Covestro and Tosoh Ruian implemented weekly quotations to provide short-term guidance on the market in the aggregate MDI market. When the goods are tight and priceless, Tosoh's price becomes important. From 18,000 yuan/ton to 20,000 yuan/ton to 21,000 yuan/ton, a series of fluctuations gave the market the most direct price guidance, and new orders were also stopped within the month.

Four years later, what are the similarities and differences in this round of MDI price increases

This round of MDI price surge is similar to the price increase that started at the end of 2016. As a highly monopolistic industry, the two price increases are based on supply contraction under weak production expectations. Supplier behavior is the main driving force behind the price increase. force. However, the macro environment that supports price increases is different: from the perspective of the inventory cycle, the price increase four years ago corresponds to the period when the chemical industry was destocking and restocking started, while the price increase in 2020 was at the end of passive inventory caused by the epidemic. 

From the perspective of downstream demand, the demand for downstream houses and white electricity of aggregate MDI is more optimistic than four years ago. Although the pure MDI downstream textile, apparel, footwear, and hat industry are in the negative growth range, the marginal improvement is stronger than four years ago. Judging from the current supply and demand side, MDI has increased overhaul in the fourth quarter, and there is no obvious expectation of production in the short term. Demand continues to be supported, and future prices are expected to remain high.