my country’s MDI production capacity is overcapacity and the market sentiment is low in the short term

Diphenylmethane diisocyanate (MDI) is the main material for the production of polyurethane. Polyurethane has excellent performance and is one of the six major plastics. It can be used to produce products such as rubber, fiber and coatings. It is currently used in military industry, aerospace, petroleum, automobile, medical, chemical and other fields. Polyurethane has a wide range of applications and market demand continues to rise, driving the rapid development of the MDI industry.

There are two main types of MDI, namely polymerized MDI and pure MDI. Polymerized MDI has stable performance and is mainly used in white goods, automobiles, construction and other fields; pure MDI is prone to self-aggregation, requires low-temperature storage, and has a short shelf life. Currently, Mainly used in TPU, spandex, shoe soles, synthetic leather and other fields.

The MDI production process can be divided into phosgene method and non-phosgene method. At present, the phosgene production technology is relatively mature, and the liquid-phase direct phosgene method has become the mainstream production technology of MDI. However, since the phosgene production process is difficult to control and highly toxic, the development of non-phosgene methods will be of higher value in the future.

According to the “Diphenylmethane Diisocyanate (MDI) Industry In-depth Market Research and Investment Strategy Suggestions Report 2021-2025” released by the Industrial Research Center shows that, benefiting from the development of the polyurethane industry, the global MDI market demand continues to rise. In order to meet market demand, global MDI production capacity continues to increase, from 7.6 million tons in 2017 to 9.5 million tons in 2021. my country’s MDI production capacity has also shown a growth trend, but the growth rate has slowed down in recent years. In 2017, my country’s MDI production capacity was 1.42 million tons, which will increase to 1.6 million tons in 2021. Although my country’s MDI production capacity is high, the actual output is low. In 2021, the actual output will be about 1.2 million tons, and the operating rate is low.

In terms of consumer demand, my country’s apparent consumption of MDI has shown a fluctuating growth trend, increasing from 840,000 tons in 2017 to 1.15 million tons in 2021. my country’s MDI supply and demand are relatively balanced, with obvious overcapacity and product prices continuing to fall.

In terms of import and export, my country is a net exporter of MDI. In 2017, my country’s MDI export volume was 102,000 tons, which will increase to 131,000 tons in 2021. In terms of imports, my country’s MDI imports have shown a fluctuating and decreasing trend in the past five years, from 74,000 tons in 2017 to 71,000 tons in 2021. my country’s import volume of pure MDI is relatively high, mainly from South Korea and Japan; pure MDI is mainly exported to Taiwan, Vietnam, India and other countries and regions.

In terms of market competition, the technical threshold of the MDI industry is relatively high. Companies around the world that have achieved large-scale production include Wanhua Chemical, BASF, Covestro, Huntsman, Dow Chemical, and Tosoh of Japan. Among them, Wanhua Chemical has a relatively large production capacity. High, accounting for 28% of the world. In 2021, global CR3 companies will account for 65%, indicating a high market concentration.

Industrial analysts said that MDI is mainly used in the fields of polyurethane production and TUP, with a wide range of application terminals and high market demand. Benefiting from demand push, my country’s MDI production capacity and output have continued to rise in recent years, but production capacity has grown too fast, resulting in domestic MDI overcapacity and low capacity utilization.