PUdaily, Shanghai-China polymeric MDI market edges up after domestic manufacturers announced their contract or list prices for March but demands remain subdued despite downstream plants' progressive restoration after Lantern Festival, which officially marks the end of New Year celebration; market players take cautious stance feeling increased downward pressure amid demand dull, according to market sources.
China market reopens on Feb.16 after Spring Festival holidays ended but the market does not resume trading activities until the month end with players resuming and downstream plants restoring production.
Domestic manufacturers have recently unveiled their contract or list prices for March with average price increase of RMB500-800/ton over February, indicating a bullish market from the stance of producers. Spot traders, who awaited new prices for directive, consequently gain their confidence and remove hesitation amid concerns about low demand and economic uncertainty.
Spot prices rise expectedly after new prices announcement. Spot polymeric MDI prices rise from Feb.25-assessed RMB18700-19200/ton to RMB19000-19800/ton on Feb.27 in east China, according to PUdaily data.
“Our company revises our offer to RMB19800/ton this morning after the producer’s new price is known and I think the prices will be sellable, although availability is good,” said a major distributor of Shanghai sources on Feb.26.
Another major in Guangzhou said on the same day they have made some small lots at RMB19200/ton DEL Guangzhou, an price increase of RMB200/ton over yesterday, “We tentatively raise quotations today and we find it’s acceptable for buyers albeit small transactions.”
Despite prevailing high prices in spot market, most cargo holders have found themselves made few deals after they revise offers in the following trading session because high prices keep buyers sidelined and end-market consumption remains seasonally slow before peak season comes.
A distributor of PM-200 based in North China said on Wednesday they hold RMB19500/ton but concluded very little deals, “We sell out about 300 tons yesterday at RMB19300/ton but we today see little buying inquiries and thin trading.”
This is probably because most speculators and users in advance build stocks shortly after a Shanghai producer released its higher contract ahead of other counterparts and it gives out signs of price hike for the industry.
Buyers and users swiftly emerge and purchase fresh stocks after the RMB800/ton higher price is released, according to market sources.
For the moment, cargo holders either keep stably high quotations or do not offer prices and market sentiment towards later is mixed depending on sources.
The largest outlet for polymeric MDI—refrigerator doesn’t show signs of improvement as small plants that purchase feed from spot market just begin production and it remains to be seen how the refrigerator market performs in March. Large refrigerator plants get direct supply from MDI plants.
As another major downstream for polymeric MDI, construction in China is also awaiting recovery as weather remains cold and unsuitable for construction, especially for spray projects.
To specify the market’s uptrend or downtrend depends
on trading and demands and the market is to burden increasing downward
pressure if demand lull persists.