Domestic MDI Supply And Demand Is Expected To Balance In 2010

At the first pure benzene aniline -MDI Industrial Chain Summit held in November 24th, Song Rensong, director of marketing in Yantai Wanhua (600309), predicted that by 2010, the consumption of MDI (two phenyl methane diisocyanate) will exceed 1 million tons, which will reach a balance with the total capacity of over 1 million tons in China.

Bai Yi, vice president of the petroleum and Chemical Industry Planning Institute, pointed out that aniline is already in its mature stage in both technology and the market, and the demand for aniline will continue to grow due to the rapid growth of MDI in its downstream products.

From the perspective of industry competition, aniline is changing from dispersed pattern to monopoly of several big companies.

MDI or supply and demand balance in 2010, due to the serious shortage of domestic MDI capacity and production, now needs to rely on a large number of imports to meet the downstream demand. In 2006, the market supply and demand gap reached 364 thousand tons, so the main MDI producers have the expansion plan.

Yantai Wanhua plans to build 300 thousand tons of MDI capacity in Ningbo in 2010. The project has been approved by the NDRC, and Shanghai will have 350 thousand tons of equipment put into operation in 2009. Shanghai Lian Heng has determined the plan of adding 400 thousand tons of capacity in 2010; BASF plans to build a 400 thousand ton plant in Sichuan.

Li Zhaobao, an analyst with global polyurethane network, pointed out that by combining these plans, the total capacity of domestic MDI will reach 1 million 110 thousand tons by 2010, and the conservative estimate can reach 710 thousand tons.

Song Rensong pointed out that last year, global MDI consumption grew by 11% to 3 million 680 thousand tons, and the average operating rate of global installations exceeded 93%.

He predicts that by 2010, the consumption of domestic MDI will exceed 1 million tons, which will reach a balance with the total domestic capacity.

In the two category of MDI products, the consumption growth rate of downstream industries such as textiles and footwear will be relatively stable, while the demand for downstream MDI will maintain a relatively fast growth in the category of MDI products.

Polymerized MDI is mainly used for fridge and building insulation coating. Due to the current importance of building energy efficiency, it will bring opportunities to the industry.

He said that after the domestic supply and demand balance, "Yantai Wanhua not only continues to make the domestic market, but also to become the global mainstream supplier of MDI, and must take the road of internationalization."

At present, some enterprises begin to consider developing upstream or downstream industries, for example, some aniline manufacturers want to get involved in MDI production.

This industry pointed out that MDI production technology threshold is relatively high, strong monopoly, not ordinary enterprises can achieve.

For Yantai Wanhua, because aniline price is low, it is not necessary to produce aniline products by oneself. Buying from the market is more economical. Therefore, the production of aniline should not be considered in the plan of 300 thousand tons of capacity in Ningbo.

MDI upstream industry chain needs to be integrated. China Petroleum (34.59, -0.52, -1.48%, enter the bar) and Zhao Jungui, Deputy Secretary General of the chemical industry association, said that benzene was extracted from crude oil in the pure benzene aniline -MDI industrial chain. It is the main raw material for producing aniline, and aniline is the main raw material for MDI and TDI.

MDI is mainly used for automotive and building insulation materials, that is, hard foam; TDI is mainly used for soft foam such as sponge and cushion.

Among them, MDI is promising for the market because of its excellent environmental protection performance and application prospect.

At present, the domestic pure benzene plant mainly concentrates in Sinopec and PetroChina two group, its capacity and output account for 2/3 of China's total capacity and total output.

Crude oil is used as raw material of the product, so it is largely subject to fluctuations in international crude oil prices.

In the 1-9 month of this year, the import volume of pure benzene was 194 thousand and 500 tons, obviously exceeding the export volume of 38 thousand and 200 tons.

Worldwide, 75%-85% aniline is used in the production of MDI for polyurethane.

Yu Xinzhi, general manager of supply and marketing company of Sinopec Nanjing chemical industry company, pointed out that the market capacity and growth rate of aniline consumption will depend largely on the development of MDI industry.

At present, the aniline industry in China is facing fierce competition and low price, which is facing a shuffle.

For example, in the chemical industry, the two companies who engaged in central air conditioning production were involved in the chemical industry. In 2005, they changed the proceeds of the capital raising and increased the capital of Jiangsu Licht Chemical Co., Ltd., invested a total of 12 million 240 thousand yuan (101 million 460 thousand yuan), and obtained 210 thousand tons of styrene project. At the same time, they invested 110 million yuan to set up 50 thousand tons of aniline branch.

The "double benzene" project was put into operation last year, but due to the continuous decline of the industry boom, the profit of the benzene project in the first half of this year was lower than originally expected.

Insiders believe that the "double benzene" era of profiteering has ended.