This year's aggregate MDI price has been in a negative mode, and the market performance can be described as miserable. Taking the price of East China as an example, the current price of aggregated MDI is around 19,000 yuan / ton, which is more than 30% compared with the beginning of the year. It was the combination of factors such as excessive price speculation last year, loose overall supply and weak demand.
First of all, last year, domestic Wanhua equipment overhaul and foreign Bosu chemistry, Jinhu Mitsui, Dow, BASF and other enterprise installations suffered force majeure successively, domestic exports increased significantly, multiple factors superimposed to push up the price of polymeric MDI, and the price in September was even more It is a record high. As the saying goes, Shengji will decline, and the downstream will also be in conflict with excessive prices. The current trend of converging MDI is also expected.
Secondly, this year, the supply side is relatively loose. According to the statistics of chemical online, the aggregated MDI capacity in China was about 3.53 million tons per year in 2017. At the beginning of 2018, Shanghai Lianheng's 240,000 tons/year MDI capacity was put into production, which increased domestic production capacity. 6.7%. Although the domestic installations have been overhauled this year, the overall operating rate has remained above 80%. The Sadara plant, which was put into operation last year, has also begun to stabilize production this year, and the supply has begun to supply the international market in a stable manner.
At the same time, the growth rate of downstream demand can't keep up with the pace of supply expansion. Polymeric MDI is mainly used in white goods and building insulation materials. In 2007-2016, thanks to the stimulus of 'home appliances to the countryside subsidy policy' Domestic demand in the domestic refrigerator industry has been at a relatively high level. With the end of relevant policies, the overall demand of the refrigerator industry is relatively cold. China is the largest producer and exporter of refrigerators, and the United States is the largest export destination of China's home appliance industry. The Sino-US trade war has also caused damage to China's refrigerator industry. In addition, the country's real estate regulation has been overweight in the past two years, which has caused the real estate industry to be cold. This is bad for building insulation materials and home appliance sales. On the other hand, domestic Due to strict environmental inspections, a large number of downstream factories have been restricted or even shut down, and the demand for polymeric MDI is weak.
In the long-term, the prospect of converging MDI is also not optimistic. On the domestic supply side, it is estimated that by the end of 2020, China's MDI production capacity will increase by 1.54 million tons / year, the growth rate will reach about 43.6%. International supply also has a large-scale expansion, it is expected In 2020, the newly added capacity in foreign countries will reach 950,000 tons/year. The newly added domestic production capacity will also be greatly resisted if it wants to find exports.
On the export side, Sino-US trade frictions are constantly escalating. The United States has been China's largest exporter of MDI. The average annual export volume in recent years is about 26%. Although MDI is not currently subject to tariffs, the United States has threatened It may be necessary to further impose tariffs on China's 200 billion US dollars of products. At that time, if the implementation of the increase, it will be a major blow to domestic MDI exports.
In summary, the recent MDI market is sluggish. In the long run, domestic production capacity will expand significantly in the next few years, while demand growth from downstream and terminal industries is very slow. Various policies in previous years have overdrafted the demand of the home appliance industry. The continuous pressure on the real estate market, the demand for construction is not optimistic. The overall pressure on the MDI market is large, and the future is worrying.