SunSirs: The MDI Market Rebounded After a Decline Last Week (May 11–15)

Price trend

According to the SunSirs Commodity Market Analysis System, from May 11 to May 15, domestic market prices for MDI halted their decline and began to rise. The average price stood at 18,933 RMB/ton at the start of the week, reaching 19,433 RMB/ton on May 15—marking a weekly increase of 2.64% and a year-on-year increase of 17.42%. Throughout the week, frequent reports of maintenance shutdowns at major manufacturers boosted market confidence. Consequently, some traders raised their quoted prices, and the spread of low-end offers narrowed. Overseas orders remained stable, while domestic demand was driven primarily by essential consumption, resulting in limited incremental growth in overall demand.

Market analysis

Supply Side: Tosoh Corporation's MDI facilities in Japan—with annual capacities of 130,000 tons and 70,000 tons, respectively—are scheduled to commence scheduled maintenance shutdowns at the end of April, with the process expected to last approximately 40 days. Meanwhile, a 300,000-ton/year MDI facility at a plant in Shanghai was shut down for maintenance on May 11; this shutdown is expected to last about one month, keeping supply conditions tight. Additionally, the same company's 250,000-ton/year MDI facility located in South Korea is currently operating at reduced capacity.

Cost Perspective: Last week, the benzene market trended downward amidst weakness. Overall expectations regarding benzene supply and demand remain relatively tight, and port inventories continue to decline. Currently, significant divergences persist between the U.S. and Iran regarding the content of peace talks; consequently, geopolitical risks remain volatile. Oil prices are trending stronger in the short term, providing support to the benzene market; however, upward momentum is constrained by sluggish demand. Market participants should closely monitor developments in the U.S.-Iran situation.

Demand Side: Downstream demand remains moderate; inquiries have increased, but actual transaction volume remains limited.

Market Outlook

As of May 15, the overall supply in the MDI market remained tight, while domestic demand provided only moderate support. Market participants were closely monitoring feedback from downstream sectors; consequently, the MDI market is expected to undergo a period of consolidation in the short term.

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