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PU Materials Prices Rise Unexpectedly in Slack Season

NEWS

PUdaily, Shanghai- In the traditional slack seasons July and August, part of PU materials market go up, which leads to the rise of PU composite index again. In July, isocyanate products price increases significantly, and polymeric MDI together with TDI prices increase a lot compared with June. In July, PO suppliers’ inventory is in a low level, and downstream demand rise, PO manufacturers continue to sell goods nervously, and the overall price rise slightly compared with June. Driven by this condition, polyether polyols market also go up slightly. Adipic Acid market started to go up slowly. According to statistics from PUdaily, the PU composite index trend chart is shown below:

Our analysts consider the reasons for price rise as the following factors:

1. Owing to the bearish views of the market players in early period, both downstream and trade inventories are at a low level.

2. Part of manufacturers’ overhauls lead to supply shortage.

3. Part of downstream manufacturers come into production peak season ahead of time, which means downstream players increase workload ahead of time and orders are made in order to make preparations for traditional peak season. As part of raw materials price has fell to a low level in June, downstream buyers purchase materials at a relatively low cost level.

Up to now, part of PU materials market price remain up, and part of PU materials market turns from uptrend to stalemate, while a small quantity of products remain running in a low level. Relevant products market news of yesterday are as follows:

 

Propylene Oxide


East China propylene oxide price increases today. Mainstream PO discussions from local suppliers are at RMB 10,550-10,650/ton DEL for contract customers, and RMB 10,700-10,800/ton for new customers. The price from Shandong suppliers is at RMB 10,600/ton DEL.

Shandong and North China propylene oxide is in tension supply. PO price moves up on Aug. 9 and the market is digesting orders mostly. At present, PO price is discussed at RMB 10,400-10,500/ton EXW, and deal price is at around RMB 10,200-10400 EXW.

 

TDI


China TDI market increases further on Aug. 9. Cangzhou Dahua raises weekly offer up by RMB 500/ton to RMB 32,000/ton ex-works in drum this morning, stimulating market confidence for distributors and traders, who follow to raise prices instantly. Shanghai sources are discussed at around RMB 33,000-33,500/ton in East China and at RMB 31,800-32,000/ton in South China. China-made sources are discussed at around RMB 32,000-32,500/ton in East China and at around RMB 31,500/ton in South China. 

 

Polymeric MDI


China polymeric MDI market keeps stable running today. Market keeps quiet and no change occur in supply and demand. Main quotations remain stable recently. Actual deals are made less just based on rigid demand. At present, Wanhua sources are discussed at around RMB 26,500/ton in East China; BASF sources are discussed at around RMB 26,000-26,500/ton; Huntsman 5005 are discussed at around RMB 26,000-26,500/ton; Covestro 44V20 sources are discussed at around RMB 26,000-26,500/ton.

Adipic Acid


China AA market maintains at high level today. Market traders are reluctant to make offers at low prices and quote their prices at high end.

Regarding prices, in east China, Xinjiang Tianli offers at RMB 8,700-8,750/ton with cash payment, down by RMB 200-250/ton. Shandong Haili, Hualu and Henan Shenma are heard offered at RMB 8,600-8,700/ton. Shanxi Yangmei and Kailuan Clean Coal are heard offered at RMB 8,400-8,600/ton.

Sources from PetroChina Liaoyang and Xinjiang Tianli are a little tight while other goods are sufficient.

Slab Polyols


China slab polyols price is on the rise today continuously. The market supply is short. At present, mainstream slab polyols discussions are at RMB 11,300-11,600/ton DEL in bulk in East China. In North China and Shandong province, the price is at around RMB 11,200-11,400/ton EXW in bulk, and 11,400-11,700/ton DEL in bulk in South China.

Adipic Acid


China AA market maintains at high level today. Market traders are reluctant to make offers at low prices and quote their prices at high end. Regarding prices, in east China, Xinjiang Tianli offers at RMB 8,700-8,750/ton with cash payment, down by RMB 200-250/ton. Shandong Haili, Hualu and Henan Shenma are heard offered at RMB 8,600-8,700/ton. Shanxi Yangmei and Kailuan Clean Coal are heard offered at RMB 8,400-8,600/ton. Sources from PetroChina Liaoyang and Xinjiang Tianli are a little tight while other goods are sufficient.

BDO


China BDO market keeps tepid today. The market is full supplied though downstream rigid demand performs weakly. It is heard that market appears lower price sometimes. Mainstream BDO discussions are at RMB 10,600-11,000/ton in East China, and the deal price is at RMB 10,500-10,900/ton. The spot price is at RMB 10,600-11,100/ton, and the discussions are at RMB 10,500-10,900/ton, and RMB 11,500-11,900/ton in bulk.

PTMEG


China PTMEG market runs stably today. Market prices still stays at high level temporarily, and few lower prices have heard in market. Regarding prices, in east China, PetroChina Liaoyang offers at RMB 8,700-8,750/ton with cash payment, down by RMB 200-250/ton. Shandong Haili, Hualu and Henan Shenma are heard offered at RMB 8,600-8,700/ton. Shanxi Yangmei and Kailuan Clean Coal are heard offered at RMB 8,400-8,600/ton.

Overall, due to low downstream operation rate from July to August, part PU materials prices continue to grow. But restricted by insufficient downstream demand, the grow momentum is not high. In August which is a watershed between traditional weak season and peak season, it is expected that part of products will continue to grow, while part of products will be mainly in stalemate.