polymeric mdi has always been a product with relatively large price fluctuations, and its price trend in recent years as shown below. it can be seen that the last small peak appeared in 2012; from 2013 to the first half of 2016, the overall market price was relatively low; from the second half of 2016 to the first half of 2018, the overall price was at a high level; back to ntrend. this article mainly discusses the market in 2013 and after this time period.
1. 2013-2016
from 2013 to the first half of 2016, the price of polymeric mdi was low during this period. overall, there may be the following factors:
(1) the supply of several major oligarchs continues to increase. according to the statistics of tiantian chemical network, chemical’s production capacity in 2011 was only 850,000 tons/year. in 2013, it expanded to 1.4 million tons/year. production has been expanded to 1.8 million tons/year. the annual production capacity of shanghai was 350,000 tons in 2013, and expanded to 500,000 tons in 2014. the rapid expansion of production capacity cannot be digested in the short term, which will inevitably lead to a fierce battle for market share in the industry, and price war is an important means.
(2) since the second half of 2014, the price of crude oil has been falling continuously and has remained low for a long time, which has caused the raw material price of pure benzene to be low. market support is limited.
2. from the second half of 2016 to the first half of 2018
during the period from the second half of 2016 to the first half of 2018, the price of polymeric mdi was at a historically high level. the reason may be the following points:
(1) the new production capacity is basically digested, the market share of each manufacturer is basically stable, and there is no need to seize the market at a low price. at the same time, force majeure of global installations occurs frequently, and the overall supply is limited. although added new production capacity in 2017, due to tight supply, the overall process of infiltrating the market is relatively moderate.
(2) the rise in crude oil prices led to increases in the raw materials of pure benzene and aniline, which strongly supported prices.
(3) nstream demand is improving, providing impetus for price increases. in 2017, industries such as refrigerators and freezers, automobiles, adhesives, and cold chains all performed well.
3. from the second half of 2018 to now
since the second half of 2018, prices have been falling. in mid-december, the price approached 11,000 yuan/ton, showing signs of stabilization in the past two days. the main reason for this round of sharp drop is:
(1) the global installations are running smoothly, and the overall supply is abundant.
(2) the overall economic environment is relatively weak, there is no major growth point for nstream consumption, and the weak overall nstream demand has limited support for the mdi market. for example, industries such as refrigerators, freezers, and automobiles performed generally, and some production volumes fell month-on-month. at the same time, environmental protection and foaming agents were strictly inspected, resulting in the closure of some nstream small factories.
(3) the impact of the sino-us trade war on the industry. according to the statistics of tiantian chemical network, mdi exported to the united states accounted for about 10% of the total domestic production in 2017, and the export of refrigerators and freezers accounted for less than 10% of the total domestic production. in addition to the impact of the tariff increase itself on the market, the impact of this event on the market mentality cannot be ignored. given the weak domestic demand, there are frequent speculations that once exports are blocked, the market will be even more sad.
up to now, the price of polymeric mdi has reached a low level, but what about the market outlook? whether it will continue to fall or stop falling and rebound is still unknown. in the future, we need to pay close attention to the dynamics of manufacturers and nstream mentality.
