SunSirs: The MDI Market Continued to Decline in June

Price trend

According to the Commodity Market Analysis System of SunSirs, the domestic MDI market showed weak performance in June and continued to decline. From June 1st to 30th, the domestic market price of MDI increased from 16,333 RMB/ton to 15,500 RMB/ton, with a monthly price drop of 5.1% and a year-on-year price drop of 12.66%.

Analysis review

In early June, Wanhua began maintenance on June 5th, and the Shanghai BASF and Huntsman units were restarting. The factory had a strong willingness to raise prices, but there was no significant increase in demand. Downstream entry into the market was cautious, and there was a strong wait-and-see atmosphere. The MDI market began to decline.

In mid to late June, the market supply remained stable, downstream demand was off-season, orders were low, and large factories in the north resumed operations, but the support for the market was limited. Without obvious positive guidance, the price of MDI continued to decline.

On the supply side, Shanghai Huntsman restarted production of 350,000 tons in June. BASF's 250,000 ton plant in Shanghai restarted in June. Wanhua Fujian plant started shutdown maintenance on June 5th, with a duration of about 45 days. Large factories in the north started reducing production in mid June.

On the cost side, the raw material benzene: In June, the benzene market fluctuated greatly with the trend of crude oil, and the price at the end of the month increased compared to the beginning of the month. On June 13th, tensions escalated in the Middle East, with oil prices reaching a two month high and benzene catching up significantly. On that day, the price of benzene rose by around 250-350 RMB/ton. On June 23rd, crude oil prices plummeted and benzene began to decline. On June 1st, the average price of benzene was 5,735 RMB/ton, and on June 30th, the average price was 5,984 RMB/ton, with a monthly increase of 4.05%.

On the demand side, the downstream was in a low season of demand, and the high price of MDI was not smooth. Although there was some support from the supply side, it was greatly affected by the constraints of the demand side.

Market outlook

In the future market forecast, the MDI market supply side had a moderate willingness to raise prices, while the demand side maintained rigid procurement. Under the supply-demand game, it is expected that the short-term MDI market will adjust in a narrow range.

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