SunSirs: The MDI Market Fell Slightly Last Week (October 20-24)

Price trend

According to the SunSirs commodity market analysis system, from October 20th to 24th, the domestic MDI market initially fell before rebounding, with an overall slight decline. The average price at the start of the week was 14,333 RMB/ton, and by the end of the week it averaged 14,300 RMB/ton, a 0.23% decrease over the week and a 21.79% year-on-year decline. The MDI market performed generally well during the week, with major manufacturers lowering prices and traders quoting in line with market trends. Subsequently, the announcement of major manufacturers' maintenance plans prompted traders to tentatively raise their prices, leading to an increase in inquiries and a slight improvement in the trading atmosphere.

Analysis review

On the supply side, South Korea's Kumho 200,000 tonne/year MDI plant was undergoing maintenance in early September, lasting 20-30 days. Wanhua Ningbo also scheduled maintenance in November, with the rest of its units operating smoothly.

On the cost side, benzene production in major ports in East China continued to destock, leading to weak market sentiment. Coupled with the downstream's lack of follow-up, exacerbating losses, and insufficient new orders from end users, secondary downstream inventories remained high and difficult to reduce, resulting in significant price transmission resistance, and the benzene market continued to weaken and decline.

On the demand side, the downstream market was not prosperous during the peak season, and the market conditions had not improved significantly. Under weak fundamentals, the MDI market is unlikely to improve.

Market outlook

After a slight increase, the MDI market returned to a consolidation state. With weak demand and insufficient support from the news side, the MDI market will maintain a weaker trend in the short term.

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