MDI
Asia’s methyl di-p-phenylene isocyanate (MDI) market was largely subdued in late 2012 amid a seasonal lull in demand and improved availability. However, spot prices in the region held steady in November because of balanced fundamentals, with suppliers reducing their plant operating rates to align with the overall market demand.
By December, polymeric MDI prices fell by 2.0-2.2% to $2,300-2,350/tonne CFR (cost & freight) Asia. Pure MDI prices shed around 2.0% in more competitive markets such as Taiwan, although most transactions hovered at $2,700-2,750/tonne CFR Asia.
In early January, MDI prices weakened further. However, during the month, a few bullish factors came into play to reverse the downward trend in MDI prices. Firstly, some restocking demand emerged in China ahead of the Lunar New Year holiday, as downstream buyers wanted to ensure that they had adequate raw material inventories when their factories resume operations in late February/early March.
In the same month, unexpected mechanical problems at two key facilities in China also reduced spot availability and fuelled further price gains. Faced with prevailing high feedstock benzene costs, MDI producers thus took the opportunity to announce price increments of $50-100/tonne on a CFR basis in early February.
Pre-holiday trading activity saw polymeric MDI prices edging higher to $2,350-2,400/tonne CFR Asia, while pure MDI prices stood firm at $2,700-2,750/tonne CFR Asia.
Updated to mid-February 2013
TDI
The toluene di-isocyanate (TDI) industry in Asia faced chellenges in November, such as seasonally weak demand that led to weekly price declines. Spot prices in China and southeast Asia fell below $3,000/tonne CFR (cost & freight) in early November and slid by 5-6% by the month-end.
Regional demand conditions remained weak in December, fuelling further TDI price declines until spot values hovered near $2,650/tonne CFR Hong Kong/ China Main Port (CMP) and near $2,700/tonne CFR southeast Asia, exerting tremendous pressure on producers’ margins. The weekly declines also reinforced bearish expectations among buyers who turned risk averse and became reluctant to build up their inventories in case TDI prices dropped further.
In January, however, prices seems to be bottoming out. TDI suppliers were adamant about rolling over or even raising prices slightly, especially in view of increased feedstock toluene costs. In addition, with the approach of the Lunar New Year holiday in February, there was some demand for restocking among buyers who had been maintaining low inventory levels. The wave of buying activity helped underpin TDI prices, which rebounded to around $2,700/tonne CFR Hong Kong/ CMP and $2,750/tonne CFR southeast Asia. However, most downstream foam factories were closed for most of February because of the festive celebrations, weakening demand.
Updated to mid-February 2013