MDI Shock Weakened TDI High Operation

Under the background of high oil price, the downstream organic chemical materials MDI (two phenyl methane diisocyanate) and TDI (toluene diisocyanate) are facing different supply and demand conditions, and the market prospect is different.

MDI because of the rapid expansion of production capacity, supply volume, price shocks weakened; TDI, because of rising demand, imbalance between supply and demand, prices are running high.

A large domestic polyurethane enterprise procurement department told reporters that from 2008, MDI will gradually enter the peak period of expansion.

This year, with the steady operation of the 240 thousand tons of Shanghai Lian Heng plant, Shanghai's Bayer 350 thousand ton plant and Japan's NPU20 million tons of equipment have been put into operation one after another, and domestic production capacity will be greatly enlarged, and the supply pressure will gradually emerge.

Against this background, insiders from the PU industry say that the price of MDI will be steadily lowered. If there is no accident, the average price in 2008 will be lower than that in 2007.

The personage expresses, because this year downstream is not prosperous, add supply to increase ceaselessly, supply increase speed exceeds the rate of demand growth, cause MDI price to drop month by month, show a slight fall trend.

In June 2008, Yantai Wanhua aggregated MDI listing price was 24500 yuan / ton, a decrease of 500 yuan / ton, compared with the beginning of the year price has dropped 1000-2000 yuan / ton.

The person said that the MDI purchase price of the enterprise is far below 24500 yuan / ton, and from the perspective of future supply and demand pattern, MDI price will continue to maintain this trend.

The person believes that for MDI, the biggest challenge this year is not the decline in product prices, but the rise in raw material prices.

Reporters learned from Yi Mao network that the price of aniline for MDI main raw materials has risen from the lowest 10000-11000 yuan / ton to the current 15000 yuan / ton.

In addition, the price of nitric acid has also risen sharply.

The sharp rise in raw material prices has swallowed most of the profits of the MDI industry.

Domestic manufacturers Yantai Wanhua's net profit fell 1.68% in the first quarter.

CITIC Securities and GF Securities predict that crude oil prices will remain high in the 3 quarter, so the supply of aniline will not change much. The price of aniline will continue to run high under the influence of cost push and tight supply.

Analysts predict that the profitability of the MDI industry will decline sharply in the 2 and 3 quarters of this year.

These people said that, despite the recent decline in TDI prices, the demand will continue to grow at a high level, despite strong demand growth.

It is understood that in 2007, domestic demand for TDI was about 350 thousand tons, and the market share of domestic goods was only about 21%, and most of them depended on imports from abroad.

According to Yi Trade net, TDI demand will maintain an annual growth rate of around 8%.

Therefore, overall, domestic demand for TDI will steadily increase in the next few years.

The official also said that in recent years, some high-risk and highly polluting enterprises have gradually entered the state of parking by the Olympic Games. Transportation control has been significantly strengthened, and the price of TDI will rise again.

However, downstream manufacturers can not accept the current market price. Therefore, GF expects that the TDI price will fall after the Olympic Games.