PUdaily, Shanghai-Domestic TDI prices reach an inflection point in early June driven by traditional slack season, stable USD prices along with bearish mood on the market outlook after the market soars in middle of May and subsides since the beginning of June. Spot traders make deliveries more actively with loosening prices. According to PUdaily pricing data on June 21, TDI prices including Shanghai and home-made sources in east China have crawled down to RMB 15,200-15,900/ton, posing loss of RMB 500-1,000/ton compared with June 10.
TDI RMB prices begin to tumble in June because of tepid demand when entering into off-season. Most sponge and upholstered furniture factories are in low operating rate with less rigid demand compared with April and May. In addition, TDI demand in June has already been absorbed partly in advance as some downstream buyers are afraid that TDI prices would go up furthermore and make efforts to add their inventories for future use since middle of May, which deepens demand weakness from down streams.
TDI USD prices stop hiking that it lasts since late March and start to fall into a stalemate in Southeast Market since early June with CIF price at USD 2,250-2400/ton in Hong Kong and USD 2,150-2,250/ton in Indonesia and Malaysia, which pressures TDI prices in China local market. TDI supply shortage situation eases in Southeast Asia and India market as supply from TDI manufacturers like OCI and Hanwha in South Korea and GNFC in India increases than before amid tepid demand in the market like India, Indonesia and Malaysia due to slack season or traditional holidays.
TDI RMB prices are also affected by bearish views in the market. It is reported that one manufacturer with capacity of 160 kt/year has already restarted on June 20 and the 128 kt/year plant in Omuta, Japan plans to resume production in early July, which will reduce appetite for China TDI export from other countries. Besides, spot traders work assiduously to sell cargoes while downstream buyers hesitate to accept offers and expect to bargain lower prices. Bearish views prevail in the market.
China TDI market is estimated to keep sluggish till late August when downstream buyers are likely to stock for peak season in September and October.
The market is difficult to warm up in short term due to supply increase in July and weak demand from June to August when it enters into off-season. Fujian Southeast Electrochemical’s 100 kt/year plant and the 128 kt/year plant in Japan are expected to restart on July 10 and early July successively, which will boost TDI supply in China and Southeast Asia market.
However, on the other hand, local TDI factories in China may take some measures to firm the prices later, which may support the market to some extent, after most companies suffer heavy losses in the past year. In 2015, domestic producers attempted to hold the prices by means of reducing operating rate and pricing together based on operation and profit as TDI transaction prices were always low in long term compared with last few years, ranging from RMB 11,000-12,000/ton.
Editor: Spring Chow
Email: zcy@chem366.com
Tel: 0086-21-61159288-809
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