Intensive Maintenance TDI Price Rise 800 Yuan/Ton in One Week, Global Capacity Loss 34%

Due to the shutdown of TDI production facilities at Wanhua Juri and Gansu Yinguang for maintenance, the supply side has been favorably pushing up the market price of TDI. As of August 8th, the price of domestic goods in East China was 13,800-14,000 yuan/ton; Shanghai goods in East China were 14,000-14,200 yuan/ton, an increase of 600-800 yuan/ton compared to the beginning of the month.

From mid to late July, the number of TDI facility maintenances gradually increased, with Wanhua Yantai, Hungary BC, and Hanwha Chemical all having stopped for maintenance, leading to a gradual tightening on the supply side. The demand side data was not favorable, with a decline in the operation of downstream sponges, a weak curing agent market, and the continued downturn in the real estate market affecting the terminal market for TDI. Although the automotive industry is growing steadily, the increase in demand for TDI is limited, resulting in TDI prices remaining at a relatively low level in July.

This week, the TDI facility at Yantai Wanhua stopped for maintenance, the TDI facility at Gansu Yinguang stopped for maintenance, and the TDI facility at Wanhua Juri slightly reduced its load, leading to a month-on-month decrease in the industry's operational rate. Looking at the maintenance situation, a total of 1.09 million tons of capacity is involved in the maintenance in August, accounting for 34% of the global total capacity.

Looking at the dynamics of domestic production enterprises this week:

Shanghai Covestro's latest TDI execution price is 14,500 yuan/ton, an increase of 640 yuan/ton month-on-month.

TDI supply from Shanghai BASF is tight.

Cangzhou Dahua's TDI, due to strong international market demand, has a tight supply of goods, with the TDI payment price this week at 16,000 yuan/ton, an increase of 1,000 yuan/ton.

Wanhua Chemical's Xinjiang facility is operating at a slightly reduced load and is scheduled to stop for maintenance on August 10th, with a technical transformation to 200,000 tons.

Gansu Yinguang's major TDI plant with an annual production of 120,000 tons has now stopped one production line, and two lines have entered a full stop for maintenance, lasting 40 days.

As the TDI industry enters a concentrated period of facility maintenance, with a reduction in supply and an expectation of improved demand, it is expected that the probability of price increases is relatively large, and there is an upward expectation for TDI. However, there are uncertain factors on the demand side that may affect the sustainability of the TDI price increase.