Domestic aggregated MDI market continued to slump. According to the sample data monitored by business associations, the average market price of aggregated MDI at the beginning of this week was 13 600 yuan/ton, and the average market price of domestic aggregated MDI at the weekend was 13 500 yuan/ton. Within the week, the price fell by 2.94%, rising by 6.88% annually, and the price fell by 30.47% compared with the same period last year.
II. Market Analysis
Product: This week, the aggregate MDI market first declined and then stopped declining, and then the focus of future market negotiations moved up. At the beginning of the week, Coase established a stable guidance price, limited supply, Ruian factory reduced the guidance price, less supply. Businessmen’s mentality was frustrated. The downturn began at the beginning of the week. There were many low-price deliveries among middlemen. However, the follow-up of real orders downstream was very poor. There were sporadic low-price transactions with small orders, and the market price fell faster. In midweek, Wanhua factories were again in the market, reducing the direct supply and distribution, strictly enforcing the settlement price of 14,000 yuan/ton in August. However, other factories did not respond for the time being, and their confidence was insufficient. However, considering the settlement price of the factories at the end of the month and their own profits, the market quotation increased slightly, but the downstream did not seem to buy the bill and the focus of negotiations was temporarily absent. Significant signs of upward movement. It is expected that next week’s market interval will be consolidated, with little room for ups and downs.
On the market side, as of Friday (8.16), the aggregated MDI market in North China remained stable. Negotiations on low prices in the market are still in place, and shipments are mainly accompanied by holders. Marketers’offer is stable or tentative to increase the quotation and wait for the closing of the transaction. The price range of aggregated MDI market in South China is volatile. North China and East China market providers tentative increase in quotations, South China market providers offer more stable, downstream pickup situation is very low, wait and see the market turnover. The aggregated MDI market in East China has strong shocks. On-site vendors tentatively raised their quotations and waited to see if the focus of the negotiations would move up. Sporadic inquiries from downstream traders are dominant.
Industry Chain: Raw Material, Pure Benzene: This week, the pure benzene market rebounded rapidly. At the beginning of the week, the US dollar price rose, the market expectations for Asian pure benzene price rose, and the pure benzene price began to rebound. Later, the Sino-US trade talks eased, the soaring crude oil further boosted the market mentality, and the price of pure benzene was rapidly rising. The demand for replenishment in mid-month led to a rebound in purchasing willingness, and the transaction price increased from 4950 yuan/ton to 5200 yuan/ton all the way in late August. With crude oil falling sharply, poor global economic data led to a resurgence of market worries, a rise in caution and a return to light buying, but the offer remained high near 5200 yuan per ton.
Aniline: Within a week, the domestic aniline Market showed a trend of rising in the north and falling in the south. In terms of raw materials, pure benzene rebounded at the bottom. The main reasons are the stabilization of crude oil and commodity prices, the hanging upside down of external plates, the decline of port stocks, and the sellout of traders, and the influence of typhoons on the parking or non-delivery of some refineries. The average tender price in Jinling, Shandong Province, increased by about 84 yuan/ton compared with last week, and the cost support was strengthened. In the aniline Market of North China, the production of aniline has been reduced due to parking and maintenance of Lanhua, Jinling King and Huatai. And there are rumors that Huatai may be delayed until October to restart, so downstream worries about rising prices, active inventory. Jinling aniline shipment pressure-free, not only Dongying plant 200,000 tons of plant load full, and led to a slight increase in North China price of 100 yuan/ton. However, due to the delay of contract shipment, East China enterprises began to release surplus cargo to the market. In order to promote shipment, some customers were given preferential treatment, and prices fell narrowly.
3. Future Market Forecast
Business Cooperative Perspective: Although some practitioners place their hopes on the upcoming traditional gold, silver and silver peak season and domestic anniversary celebrations to promote the downstream ahead of schedule, the degree of weakness in demand should be well known to all. Global economic sluggishness, from time to time release bad or favorable trade frictions between China and the United States, the domestic manufacturing index has been below normal for a long time, the downstream industry of polyurethane rigid foam industry chain has a low start-up rate, and the demand for raw material aggregated MDI will inevitably decrease. Even if the aggregated MDI products are monopolistic products with strong financial attributes, in the context of the global economic weakness, the main domestic manufacturers are also “cautious and difficult to move”. There is no fundamental mode of operation, which only depends on consumption hot events and supply-side alliances to influence the mindset of the industry and thus affect the price rise and fall. Only by starting from the supply and demand problems, reasonably solving the existing contradictions and rationalizing the profits of both sides, can the long-term healthy development of MDI industry be promoted. Business Association aggregate MDI analysts expect that short-term domestic aggregate MDI market price stabilization, weak consolidation, rise and fall dilemma.