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SE Asia MDI Market Review in 2017 H1 and Outlook for H2

PUdaily, Shanghai-

SE Asia MDI price has experienced a period of “firstly go up and then go down’ in the first half of 2017. Polymeric MDI price runs at a stable level since January just like the end of last year. From February, the price started to go up gradually to the highest level arriving at USD 2,750/ton in April. And then it started to edge down. With the end of June approaching, the price arrives at USD 2,525/ton, increase USD 850/ton compared with the beginning of this year. In the first half of this year, pure MDI price trend is just the same as polymeric MDI. PMDI price arrives at USD 2,975/ton in April, the highest level, and then edge down. Up to the end of June, the price remains around USD 2,850/ton, rise about USD 400/ton compared with the beginning of this year.

Overall, SE Asia MDI market trend keeps pace with China MDI price trend in the first half of this year, which mainly because the MDI market of various countries in SE Asia is smaller than China MDI market, and there is no MDI production equipment in SE Asia. Therefore, SE Asia MDI market is greatly affected by China market. When China MDI price fluctuates, SE Asia market would tend to narrow the gap between itself with China market. As a result, China MDI market condition is a very valuable reference for the analysis of SE Asia MDI market.

Note: the export countries are China, Japan and South Korea, and the import countries are SE Asia ten countries.

In addition to price, let’s look at the SE Asia MDI imports in the first half of this year. Pure MDI imports and polymeric MDI imports both increase to some extent compared with last year. Specifically, pure MDI imports rise 6% over the same period of last year, while polymeric MDI imports rise 18% over the same period of last year.

In terms of downstream, with constant economic development of various countries in SE Asia recently, more and more investors are keen on the real estate market of SE Asia. In addition to the popular Singapore real estate market before, there are also four emerging countries in real estate investment, namely Malaysia, Thailand, Indonesia and the Philippines. Combined with the “One Belt, One Road” policy, the footwear industry growth in SE Asia especially in Vietnam will continue to provide advantages for MDI market development. Thailand Ministry of Industry & Trade enacted The Overall Footwear Industry Development Plan from 2020 to 2025, which put forward that footwear industry will be established as the pillar export industry of the national economy by 2020, and it plans to produce 17 billion pairs/year by 2020.

Overall, with the constant economic development of various countries in SE Asia and a variety of policy deviation, such as some local tax and investment preferential policies, SE Asia MDI market will develop following a better direction as a whole. 

Prosperous economic environment and flexible policies will certainly exert positive influence on MDI market. Meanwhile, SE Asia market will be affected by every move of Chinese market, which is an important reference to SE Asia market. In the second half of 2017, SE Asia MDI market is expected to fluctuate within a small range based on supply and demand. Meanwhile, there is still a lot of room for demand improvement. It remains to be seen about this thriving market.