MDI Industry Still Has Potential To Tap

Chemical raw material MDI (two phenyl methane diisocyanate) was once a star of the capital market.

Because of the technology threshold, only a few MDI listed companies in China have been touted by various funds.

However, with the increase of cost and the increase of pollution control, the price of MDI has plummeted, and the performance of related companies has also been in the doldrums.

Shanghai securities daily data from China chemical network show that the trend of pure MDI market has been like "roller coaster" since last year. Last year, it laughed at the market by 100%, but this year it fell to 22000 yuan / ton from the beginning of 43000 yuan per ton, or nearly 50%.

It is worth noting that the price of upstream benzene rose by US $1400 / ton in June this year, driving the price of aniline products from 11700 yuan / ton to 15000 yuan / ton in 5-6 months, indicating a sharp increase in cost pressure.

During this period, most of the prices of chemical products increased with the surge of international oil prices. However, due to the cancellation of export tax rebates for footwear products, the MDI industry chain started to "winter" ahead of schedule.

Liu Xintian, a veteran in the industry, pointed out that the coldness of the MDI market limits the continuing upward movement of aniline prices, which further limits the upward trend of the cost of crude oil in the upper reaches of aniline.

The downturn in downstream demand, the cancellation of preferential policies and the embargo on narcotics such as pure aniline during the Olympic Games directly restricted traders' enthusiasm for chemical trade.

As a result, pure benzene aniline -MDI whole industrial chain is in a dilemma of cost and price.

"Under the new problems and challenges, the development of the upstream and downstream industry chain is also very uneven. Downstream products MDI is still a technology and capital intensive industry, and it is difficult to form a scale to support the market in the short term."

He said.

Although the industry is entering the "ice age", what is the future trend of MDI?

According to Liu Xintian analysis, the rapid development of the downstream polyurethane industry is increasing demand for MDI. China's annual demand for MDI has maintained an average growth rate of 22%. Domestic output far exceeds the current demand and imports to a large extent.

In 2001, the import volume of domestic MDI was 189 thousand tons, and by 2007, it reached 458 thousand tons. These figures indicate that MDI market still has great potential to tap.

"On the one hand, in the aspect of polyurethane foam plastics, the insulation materials made by MDI have absolute advantages. On the other hand, in the field of waterborne polyurethane, MDI has the advantage of replacing TDI.

The above demand for MDI will remain at an annual average growth rate of around 30%. "

Liu Xintian said.

At present, the domestic MDI giants are still expanding rapidly.

By June this year, the total capacity of the three giants of Yantai Wanhua, Shanghai Lian Heng and Bayer Shanghai has reached 1 million tons / year, and it is expected to reach more than 1 million 500 thousand tons in 2010.

Moreover, many new enterprises are also actively involved in the field of MDI, including the existing TDI manufacturers in China, such as LAN-STAR Tianjin chemical new material base, plans to build 200 thousand tons / year MDI device, one phase 100 thousand tons / year device is under construction; Gansu silver light chemical industry group Co., Ltd. plans to build 160 thousand tons / year MDI device; Nippon Pu (Ruian) Co., Ltd. 80 thousand tons / year crude MDI refining project has started construction in July 2006, and has basically completed.