The TDI market has been tumbling since this year. Especially since August, the decline has been as high as 22%.
Compared to the previous years ' Gold nine silver Ten ' boom, why TDI market this year is very different? I think there are two main reasons.
One is the supply surface loose
Many of the domestic TDI equipment in recent months have maintenance plans, but due to the recent high TDI inventory, supply stage surplus, the spot digestion is slow. The large increase in the number of imported TDI is one of the important reasons. In late July, the industry optimistic about the future. Because of the low price of foreign imports, some keen traders began to book the import source, hope in the near future sales season can have a good profit. Affected by this, a large number of imported TDI supply in August-September to Hong Kong.
But downstream demand follow-up is insufficient, so that a large number of traders holding imports have to bear the low price of selling, TDI open immeasurable empty fall. On the export side, the Sino-US trade war is escalating. Last year, the United States was my TDI's first major export, this year's trade war led to a sharp decline in exports. At the same time this year, the Indian anti-Dumping Bureau imposed a 5-year anti-dumping tax on TDI imported from China, Japan and South Korea, and the Chinese product tax rate amounted to $0.26/kg.
This led to domestic and foreign products originally planned to flow into India, partly into China, making the supply surface loose.
Second, the downstream demand is light
TDI is mainly used for the production of soft polyurethane foams and polyurethane elastomers, coatings and adhesives for automotive and furniture sponges.
According to the data released by the China Association of Automobile Industry, in July or August, the domestic automobile production and sales volume has declined in different degrees, and the demand for TDI is difficult. The paint industry has also shown a recent downturn.
This year the coating industry faces tougher environmental inspectors, starting low to become a portrayal of many small enterprises, the demand for TDI is insufficient. More serious is the downstream sponge industry. Due to environmental inspection, some downstream sponge factory shut down. At the same time, the impact of the Sino-US trade war has emerged.
According to a part of Guangdong foreign trade sponge and furniture manufacturers feedback, foreign trade sponge production after September apparent shrinkage, combined with the early Typhoon ' mountain bamboo ' influence, nearly 2 months of demand for TDI weak. However, as the TDI price slid to the cost of picking, traders were willing to make a strong bid.