TDI market is easy to rise but difficult to fall

Entering June, the domestic toluene diisocyanate (TDI) market has changed from the previous downward trend, and the price has risen from 16,400 to 16,500 yuan (ton price, the same below) at the end of May to 16,900 to 17,000 yuan
.

"From the perspective of the market outlook, although the demand is not strong, the manufacturers have a strong willingness to support the price, and coupled with the cost support, TDI is easy to rise and hard to fall in the future
.
" Meng Xianxing, deputy director of the Shandong Institute of Chemical Industry, analyzed it
.

Factory overhaul supply is reduced

Entering the second quarter, the TDI market continued to decline from around RMB 19,700.
Until the end of May, the monthly price increases of BASF and Wanhua Chemical were successively implemented.
Coupled with the support of raw materials, the TDI market began to recover
.

It is understood that the settlement price of BASF barrels in May was 16,900 yuan, and the listing price in June was 20,000 yuan; Wanhua Chemical's barrel settlement price in May was 16,800 yuan, and the listing price in June was 18,000 yuan
.
On June 6, Covestro's guidance price was 17,500 yuan, an increase of 600 yuan from the previous month, which continued to increase the market's bullish mentality
.

"This time the TDI market has picked up, although the increase is not large, but for the market that continues to be sluggish, it means that the staged bottoming has been completed
.
" Meng Xianxing said
.

From the perspective of device operation, some companies have maintenance plans, and the supply of TDI in the market will be reduced by then
.
At present, Fujian Wanhua 100,000 tons/year TDI plant is undergoing routine maintenance on June 1; Gansu Yinguang 120,000 tons/year TDI plant is shut down; Juli Chemical Yantai 3+50,000 tons/year plant shuts down for maintenance; Shanghai BASF The 160,000-ton/year TDI unit will operate with reduced load; Shanghai Covestro's 310,000-ton/year unit will also be overhauled at the end of June or early July
.

Meng Xianxing analyzed that if the overhaul of production enterprises is carried out as scheduled, the supply of TDI will be reduced, traders are not willing to offer low prices, and the quotations will increase
.

Tight raw materials and high prices

At present, the market price of raw material toluene is at a high level, which is a strong support for the cost of TDI
.

The conflict between Russia and Ukraine has caused the price of crude oil to fluctuate and rise for a long time, and the catalytic cracking industry chain has suffered large losses.
The reduction of equipment load has become a common operation for some cracking enterprises in Asia
.
At the same time, there has been a global decline in oil refining units
.
Affected by this, China began to export a large amount of toluene, the oversupply situation in the domestic toluene market has been alleviated, and the price has risen, from about 7,700 yuan at the end of March to the current 8,800-9,000 yuan
.

From the perspective of port inventory, as of mid-June, the total domestic inventory of toluene in the north and south ports was about 88,000 tons
.

Wang Quanping, chief engineer of Shandong Kenli Petrochemical Group, believes that the favorable support brought by the conflict between Russia and Ukraine and the production reduction in Libya is still there, but the recent economic and demand expectations have weakened, which constitutes a resistance to the upward trend of oil prices
.
The price difference between America and Asia is still large.
In theory, there is room for export arbitrage, and the port inventory is declining.
The domestic spot toluene resource is not sufficient.
It is expected that the short-term toluene price will continue to remain high, and the support for the TDI market is still strong
.

Downstream demand expected to improve

Demand has always been one of the important factors restricting the TDI market
.
The contradiction between supply and demand is difficult to improve, which has become a stumbling block for the TDI market to improve
.
Especially in the off-season, weak demand means that there is not much room for TDI to attack
.

Specifically, since the second quarter, the downstream polyurethane elastomer market has been sluggish, the fundamentals have been in a state of oversupply for a long time, the market is under pressure, and the bottom is still being explored
.
At present, the price of polyurethane elastomer has fallen below 12,000 yuan, running to a quarterly low of 11,900 yuan
.

Affected by the domestic epidemic, the consumption of polyurethane elastomers decreased by about 20% from the first quarter, and the year-on-year decrease reached around 30%, and the demand side was obviously lacking
.
The supply side is abundant.
Although some major manufacturers have reduced their burdens and reduced production, the overall volume is sufficient, and the pressure on suppliers' inventory is relatively large.
The contradiction between supply and demand in the market is further intensified.
It is expected that the price of polyurethane elastomer will continue to decline, which will hardly bring demand to TDI.
support
.

"However, after July, the demand for waterproofing and runway industries may gradually improve
.
Primary and secondary schools across the country will be on holiday, runway projects will continue to be constructed, and the waterproofing industry will resume normal operation after the rainy season, which will be good for the TDI market
.
" Analysis Wang Quanping say
.

In addition, the production and sales data recently released by the China Association of Automobile Manufacturers showed that the production and sales of automobiles showed a recovery in May, with 1.
926 million and 1.
862 million vehicles completed respectively, a month-on-month increase of 59.
7% and 57.
6% respectively
.
Both the economic recovery and the control of the epidemic will help the TDI market
.