China PMDI to fall below $2,833/t on supply rise

20 March 2008 05:27 [Source: ICIS news]

GUANGZHOU, China (ICIS news)--China’s polymeric methylene diphenyl diisocyanate (PMDI) prices are expected to fall below yuan (CNY)20,000/tonne ($2,833/tonne) in early 2009 on increased domestic supply, an executive of Mitsubishi Corp said on Thursday.

“Local prices could fall below CNY20,000/tonne delivered by early next year as domestic demand was unlikely to catch up with the rapid domestic capacity expansion,” said Tomoki Ofuji of Mitsubishi’s urethane and coating materials team.

Supply was expected to rise significantly early next year when Bayer began supplies from its new 350,000 tonne/year unit in Caojing, Shanghai, Ofuji added.

PMDI was currently selling at around CNY22,000-23,000/tonne delivered and prices were expected to be stable at this level for most of this year, he said.

While China’s PMDI demand grew by 17-18% in 2007 to hit 450,000 tonnes, this year demand growth was forecast at a lower 15%, he added.

The refrigerator application sector would continue to drive the PMDI market, as the Chinese government had recently started subsidising local farmers' purchases of small and medium-sized refrigerators, he said.

($1=CNY7.06)

By: Chow Bee Lin
+65 6780 4359

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