Since entering the middle and late May, the bearish toluene diisocyanate (TDI) market has dominated, the price has continued to decline, and the low-end price has broken down 17,000 yuan (ton price, the same below). On June 2, the TDI reference price was 16,000 yuan, down 17.95% compared to May 1. In the off-season, the contradiction between supply and demand is difficult to be straightened out in a short time, and the TDI market still has room for downward adjustment.

The negative prevails

“Recently, Fujian Wanhua TDI device produced qualified products, Gansu Yinguang TDI device also restarted smoothly.” Meng Xianxing said, “Although the two devices successfully drive, but because the product into the market has a lag, so the TDI market supply and demand side has not changed substantially, the reason for affecting the market is more the change of mentality under the expectation of increased supply.” Enquiries have dropped to freezing, transactions remain thin, even just-needed orders are delayed, and TDI prices are down nearly 10% on a weekly basis.”

At the same time, the TDI external market has not avoided the decline. The European TDI market is in a weak balance between supply and demand. Although Germany BASF 300,000 tons/year plant parking favorable support, but in the context of economic recession in Europe and the United States, the terminal performance is still average. Southeast Asia TDI market decline is more obvious, the overall performance of local demand is general, are mainly to just need to buy, superposition the market TDI guidance prices have been reduced, local customers to avoid procurement risks, expect to fall atmosphere.

Industry insiders pointed out that the market is still waiting to see when Gansu Yinguang and Fujian Wanhua TDI device products enter the market and the specific distribution situation. In the future market, the supply side is interwoven, but the mood of the industry is weak under the pessimistic mood, and the current Fujian Wanhua equipment products are set off smoothly, it is expected that the TDI market will continue to fall in the short term.

Profit margins have narrowed

Toluene as the main upstream raw material of TDI, its market remains stagnant. Wang Quanping said: “Luoyang petrochemical, Yatong petrochemical toluene equipment shutdown maintenance, local supply is tight, refinery shipment prices take the opportunity to increase.”

But toluene demand is still weak. Gasoline prices are still low, the oil market is limited in toluene interest, domestic ethylbenzene product production increased, some businesses are concerned about ethylbenzene in the oil market to replace the application of toluene.

In the future market, the price of domestic toluene increased slightly, on the one hand, because of the increase in domestic maintenance devices, and the supply was slightly reduced; On the other hand, in the case of the lack of profit in gasoline mixing, the price of toluene is lower than that of other aromatics, and the tendency to use toluene in mixing is stronger, which will also lead to the reduction of export sales of local refining enterprises, and the high cost of port holding also supports the upward price. However, the comprehensive profit of the downstream area of the chemical industry is poor, and businesses lack enthusiasm for raw material procurement, which greatly restricts the price of toluene.

From the perspective of liquid chlorine, another raw material of TDI, because individual chlor-alkali units in North China have entered the maintenance state, there is certain favorable support from the supply side, but considering that the profits of the downstream industry have not improved, the short-term liquid chlorine price has not fluctuated much.

Overall, due to the strong market price of TDI raw materials, TDI profit margins continue to narrow.

The demand has not been started

TDI’s downstream soft foam polyether prices are gradually declining. Although the supply side of the increment is not much, but TDI imports expected to suppress the market bullish mentality, coupled with TDI upstream raw material center of gravity has moved down, there is no volume.

In the future market, the fundamental support of TDI is not strong, because the price of downstream polyether off-season continues to fall, the willingness of polyether enterprises to open positions is not strong, and under the influence of polyether profit thin and price pullback, the cost pressure of hydrogen peroxide method propylene oxide and propylene oxide/styrene process increases, the possibility of scheduling adjustment of polyether large factories, and the demand for TDI is weak.

In addition, the uncertain prospects for global economic recovery are expected to continue to affect the performance of the TDI industry chain.

Post time: Jun-09-2023