Asia:

In Q2, most of China MDI factories was in normal operation. From May to June, routine maintenance was carried out in Shanghai factories. As a whole, the operation rate of domestic MDI suppliers was decreased by about 6.3 percentage points quarter on quarter. Tosoh Japan’s 200 kt/a MDI unit was also under maintenance from May to June. Besides, At the beginning of June, due to unexpectedly power failure, Tosoh’s another MDI unit with the capacity as 200 kt/a had to shut down. Therefore, their distillation unit in China Ruian had to operate at a low load. It is expected that the factory is expected to return to normal in late July. The   operation rate of Asian MDI suppliers was about 5.3 percentage points lower  quarter on quarter. In Q2, MDI market price moved back and consolidated in  China, Southeast Asia and other Asian countries. During the period from May to  June, China PMDI market offer was consolidated and digested in the range of RMB 16,000-18,000/ton (USD 2190 – 2460/ton). The trades take the expectation that in the coming Q3, supply will continue to be tight due to maintenance of some   producers in Asia and downstream demand will pick up. Therefore, by the end of June, the mentality of China distribution sector had improved, and the offer was  relatively stable. Affected by the weak demand caused by the worsening of the epidemic situation again, Asia MDI suppliers’ CIF offer in Southeast Asia was  weaker. As of the end of June, the local offer price for PMDI was about USD 2,200/ton, with the lowest of USD 2,150 /ton heard, which was lower than the market price of the same period in China. With the gradual improvement of epidemic control, the market is expected to rebound consolidate while building the bottom  in July.

Europe:

In Q2, MDI supply in EU market continued to be under pressure. MDI unit in the Covestro Brunsbuettel Germany was under turnaround from early May to early June. However, according to local market news, the plant still had about 16 k tons of MDI production loss this month due to outage. In addition, Dow's MDI plant in Estareya, Portugal, also lost about 10 k tons of production output this month. Borsodchem Hungary was stocking up for maintenance, where it controlled the supply volume in EU market. In addition to the MDI supply end, the import and   export trade of Europe continued to be restricted in Q2 due to global factors such as the blockage of the Suez Canal, the sharp rise in sea freight and tight freight space.


Middle East:

In Q2, the PMDI price in the Middle East fell back, and the operation rate of MDI unit in Dow Sadara plant recovered slowly after a short turnaround in this March. From May to June, the overall operation rate was about 70%. Recently, it was  reported that the rate of the plant was ramping up to 80%. Therefore, the supply to the local market was gradually better. In Q2, the volume of polymeric MDI from Saudi Arabia to China in the Middle East moved up slightly (about 10-15%)  year on year. However, the supply of from Asia MDI suppliers increased more year on year. In Q2, the demand market in the Middle East was flat, and it is expected that the demand market will be tepid in July. As of the end of this month, the CIF price of polymeric MDI in the Middle East market was about USD 2,450 / ton.

North America:

In Q2, the local MDI suppliers in North America gradually recovered from the impact of the cold wave. Most of the facilities previously interrupted by this impact had been restarted. Compared with the first quarter, the supply of MDI producers in North America increased in this quarter. However, the continuous lowoperation rate of raw material chlor alkali plants led to a tight supply of raw materials for local MDI plants, which limited the further improvement of the operation rate of MDI plants. On the contrary, the demand for MDI from    downstream PU system material producers in America was increasing. As a result, the import dependence on Asian MDI producers strengthened in the second quarter.