SunSirs: In July, the MDI Market Fell First and Then Rose

Price trend

According to the SunSirs’ commodity market analysis system, the domestic MDI market experienced an initial decline in July before rebounding, with an overall decline. From July 1 to 29, the domestic MDI market price rose from 15,500 RMB/ton to 15,483 RMB/ton, a monthly drop of 0.11% and a year-on-year decrease of 12.11%.

Analysis review

In early July, with the exception of the uint of Wanhua Fujian undergoing maintenance, major plants in northern China operated at reduced capacity, while other plants remained stable, ensuring a steady supply. Downstream demand was weak, with small orders predominantly leading to a lack of confidence among industry players, and MDI prices continued to decline.

In mid-to-late July, after a period of continued decline, suppliers tentatively pushed up prices, leading to a convergence of low-end prices to around 15,500 RMB/ton. Transactions at higher prices proved difficult, and the MDI market began to consolidate under the pressure of supply and demand.

On the supply side, Shanghai units had completed maintenance and were gradually restarting. Dongcao Ruian's 80,000 ton/year MDI unit began maintenance on July 23rd, with an expected duration of approximately 35 days. Hungary's 400,000 ton/year MDI unit also began shutting down for maintenance on July 23rd, with an expected duration of approximately 30 days.

On the cost side, the market for raw material benzene fluctuated within a range in July, with overall prices rising slightly compared to the beginning of the month. The average price at the beginning of the month was 5,942 RMB/ton, and at the end of the month it averaged 5,988 RMB/ton, a monthly increase of 0.75%. The market for raw material aniline experienced a volatile decline in July. The market price of aniline was 7,900 RMB/ton on July 1st and 7,375 RMB/ton on July 29th, a monthly decrease of 6.65%.

On the demand side, downstream buyers were buying on dips, driven by urgent needs. Inquiries were low, suggesting insufficient demand support.

Future outlook:

As the end of the month approached, the market atmosphere became weaker, middlemen were not willing to ship goods, and the supply side was more willing to maintain prices. Waiting for the latest price guidance from major manufacturers, it is expected that the MDI market will consolidate in the short term.

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