China’s TDI market has skyrocketed from CNY 15,000/tonne in August to surpass CNY 25,000/tonne, an increase of nearly 70%, and continues to show an accelerated uptrend.     

Figure 1: China TDI Prices From August to October 2022    

The recent accelerated TDI price gains are mainly due to the fact that the favorable support from the supply side has not subsided, but has intensified:     

This rising wave began in early August when Covestro declared force majeure on its 300kt/a TDI plant in Europe and BASF’s 300kt/a TDI plant was also shut down for maintenance, mainly due to significantly increased TDI production costs under the European energy crisis.     

On September 26, an explosion was detected originating from Nord Stream pipelines. Europe’s natural gas crisis is expected to be difficult to alleviate in the short term. Meanwhile, the difficulty of restarting TDI facilities in Europe will increase, and the supply shortage may exist for a long time.     

On October 10, it was heard that Covestro’s 310kt/a TDI facility in Shanghai was temporarily shut down due to malfunction.     

On the same day, Wanhua Chemical announced that its 310kt/a TDI facility in Yantai will be shut down for maintenance on October 11, and the maintenance is expected to last for about 45 days, longer than the previously expected maintenance period (30 days).     

Meanwhile, Juli Chemical’s TDI delivery period was greatly extended due to inefficient logistics in Xinjiang amid the epidemic.     

Gansu Yinguang Chemical’s 150kt/a TDI facility, originally scheduled to restart at the end of November, may postpone resumption due to the local epidemic.     

Except for these favorable events on the supply side which have already occurred, there are still a series of upcoming good news:     

Hanwha’s 150kt/a TDI facility in South Korea will be maintained on October 24.     

BASF’s 200kt/a TDI facility in South Korea will be maintained at the end of October.     

Covestro’s 310kt/a TDI facility in Shanghai is expected to be maintained in November.     

TDI prices eclipsed the previous high of CNY 20,000/tonne, which has already exceeded the expectations of many industry players. What everyone did not expect was that in less than a week after China’s National Day, TDI prices soared beyond CNY 25,000/tonne, without any resistance.

At present, industry insiders no longer make predictions about the market peak, as the previous predictions have been easily broken many times. As for how high TDI prices will eventually go up, we can only wait and see.

Declaration:

The article is quoted from【pudaily】

(https://www.pudaily.com/News/NewsView.aspx?nid=114456).

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