The haze of the aggregated MDI market is difficult to disperse

Since July, the aggregated MDI market has shown a volatile downward trend as a whole
.
Taking Wanhua goods as an example, the average price in July was 16,700 yuan (ton price, the same below), down 6.
77% month-on-month and 17.
82% year-on-year; Shanghai’s average price was 16,400 yuan, down 5.
92% month-on-month and 17.
97% year-on-year.
%
.

Looking at the market outlook, demand is in the off-season, and it is difficult to boost buying sentiment.
In August, the aggregated MDI market may continue to be sluggish, but manufacturers are more willing to support prices, and it is expected that the room for price declines will be limited
.

Manufacturers support prices and the market stabilizes

In July, the aggregated MDI market fell sharply.
After the price entered the low point of the year, the game in all aspects increased
.
However, as an industry with a high concentration of production capacity, manufacturers have a strong ability to control the disk
.
Therefore, in the face of the continuously declining market, manufacturers are more willing to support prices, the start-up load has decreased, and the production of Ningbo and Chongqing plants has been reduced.
The decline of the aggregated MDI market slowed down
.

At the end of July, the settlement price of the main factories of the supplier was higher than the expected level, and the mood in the market was optimistic
.
Up to now, the mainstream price of aggregated MDI domestic sources is 16,200 yuan, and the mainstream price of Shanghai sources is 16,000 yuan
.

Pan Jinsong, a professor-level senior engineer at the Shandong Institute of Industry and Information Technology, said that from the perspective of the future, the 240,000-ton/year plant of Shanghai Lianheng Phase II also has an overhaul plan in August, while other MDI plants are running at a reduced load, and the market supply is expected to decrease.

.
In addition, there is also strong support on the cost side.
It is expected that the aggregated MDI market in August may be better than that in July, and the room for decline is limited
.

Cost squeeze narrows profit

From the perspective of raw materials, the price of pure benzene has been at a high level recently, which has continuously eroded the profit margin of polymerized MDI
.
In the second quarter, the average profit per ton of MDI products was 3,620 yuan, down 47.
84% from the first quarter, while the profit in July continued to drop to 2,014 yuan
.

In July, the domestic pure benzene market showed a downward trend as a whole
.
In the first ten days, crude oil prices fluctuated and fell, and the outer market of pure benzene fell sharply, which lacked support for the market.
The pure benzene stock in ports was at a low level since February 2017 and continued to decline.
However, the downstream price pressure remained unchanged, and the pure benzene market in East China fell sharply
.
In the middle and late July, crude oil and pure benzene continued to rise, and the market sentiment improved.
The stock of pure benzene in ports continued to decline.
The price of pure benzene in East China rose widely, and the negotiated price climbed to 9600~9650 yuan
.
At the end of July, the negotiated price of pure benzene in the East China market quickly adjusted back to 8850~8900 yuan
.

Even so, the overall price of pure benzene in July was still at a high level during the year
.
Taking the East China market as an example, the price of pure benzene is 8950~9700 yuan, and the average price is 9369 yuan
.

In terms of supply, the output of pure benzene in July was about 1.
27 million tons, a decrease of 10,000 tons from the previous month and an increase of 26,000 tons or 2.
09% from the same period last year
.
"From the perspective of the market outlook, the pure benzene plants in Qilu, Yangzi, Shanghai, Maoming, etc.
are planned to be restarted, but the plants such as Fujia, Quanhua, Hengli and other plants have been reduced.
It is expected that the supply of pure benzene in the market will continue to increase in August
.
" Shandong Kenli Petrochemical Group chief engineer Wang Quanping said
.
However, the imported goods have not yet been concentrated in the port, and the growth rate of pure benzene inventory in the port is relatively slow
.

In terms of demand, the increase in downstream demand for pure benzene is limited
.
Although there are not many new maintenance devices for styrene, aniline and adipic acid, the losses of phenol and caprolactam enterprises are increasing.
Therefore, the maintenance of phenol and caprolactam devices in August is more concentrated, which may reduce the downstream demand
.

To sum up, it is expected that the pure benzene market will be organized in a range in August, with little room for fluctuation and still at a high level, and it is difficult to increase the profit of aggregated MDI
.

sluggish demand

As the main downstream of polymerized MDI, the domestic rigid foam polyurethane market continued its downward trend in July.
The position was covered three times in the month.
In the early stage, it was only maintained with moderate rigid demand.
From the end of the month to the new low position of the year, some traders or downstream closed positions with a slight increase in volume.
The bubble market stopped falling and rebounded, but after the rise, the orders shrank again, and the high price was immeasurable
.
Taking the Shandong market as an example, the average price of rigid foam polyurethane in July was 9,505 yuan, down 9.
4% month-on-month and 31.
86% year-on-year
.

At present, the operating rate of the rigid foam polyurethane industry has decreased, the supply volume of suppliers has continued to be loose, and the operation of reducing warehouse shipments has continued
.
However, the consumption of the main downstream industries is relatively small, and the demand for the entire industry of rigid foam polyurethane is still general
.

According to the analysis, the raw material propylene oxide still supports the short-term cost of the market, but some of the demand has been overdrafted in advance in August
.

From the perspective of terminal demand, the demand for refrigerators and freezers continues to be average
.
The pipeline, spray coating, and sheet metal markets maintain some rigid-demand orders.
With the low price, individual inquiries have increased, and a small number of transactions have been completed, but the overall terminal demand is still insufficient to improve, and the support capacity is limited
.

On the whole, the downstream gas is generally purchased, and the demand for raw material polymerization MDI is still difficult to increase
.