After the weak upward TDI price surge after the Spring Festival turned into a downward trend, the long decline lasted for two full months, until mid-April, the lowest price of domestic goods fell below 10,000 yuan, and Shanghai goods approached the 10,000 yuan mark.During the decline, there was both a high-level retracement momentum and a bearish macro-level tariff war. At the same time, with the expectation of new production capacity being put into operation, the demand side continued to be weak. Against this background, prices fell to their lowest point in five years.
Merchants in the market generally actively sold in April, and some pre-sales locked in N+2 orders. There were some oversold conditions in the market, but as the price fell below 10,000 yuan, it gradually attracted buying gas, and the market bottomed out in mid-April.However, since then, market conditions have gradually improved. On the one hand, exports have been repaired due to a 90-day suspension, and on the other hand, it is rumored that the production time of the new plant has been postponed to July. In addition, the deep decline has led to continuous losses on the production side. After the bottom of the market is released, the price reverses and repairs. As of the release, the national average price of TDI has risen from 10,158 yuan/ton to 12,475 yuan/ton, a rebound of 2,317 yuan/ton, an increase of 22.8%.
Centralized supply for summer maintenance does not increase but decreases
In addition to the postponement of the commissioning of the new plant, the maintenance of the TDI plant will be concentrated in the three months of summer, and the industry's output is expected to be significantly reduced from June to August. This is very different from the market's forecast at the beginning of the second quarter. At that time, the market believed that the summer would be supplemented by new equipment, and the industry's output would remain at a high level.The current supply does not increase but decreases, which directly drives the repair of the price side, and the relationship between the rebound market and the performance of the demand side is weak.
According to the current conditions, the output of the TDI industry may remain below 110,000 tons from June to August, which is at a moderate level.Judging from the export direction, since it exceeded 50,000 tons in March, the export volume shrank to less than 40,000 tons in April, mainly affected by tariffs.Sea freight began to rise rapidly in May. Although there are some remaining export orders, the increase in export volume in subsequent months may be limited, but the monthly export volume may be maintained at around 40,000 tons, which is a good level.
Once subsequent exports increase by more than 40,000 tons in a single month, there will be a risk of shortage in domestic supply. In view of the current background of low social stocks as a whole, the increase in summer production is limited, and exports will become a major change in restraining supply.
At the end of the month, the market's trading turned light, and there is expected to be differentiation.
After nearly 6 weeks of continuous rebound and repair, the price has increased by more than 20%, but the national average price of 12,475 yuan/ton is still at a low level in the trend over the years.Due to the collective short positions in the early stage of the trade market, most merchants' operations became more difficult in May, and there are still some open short orders to be closed.Downstream users give priority to the consumption of stock, and they are also restrained from entering the market to purchase spot.Regarding the future price trend, the market is also divided. Most merchants are cautious and expect more based on the background of factory costs, output, and domestic and foreign trade distribution. However, at the same time, some merchants are actively taking orders when the transaction volume is too small and the increase is large. Confidence in the continued upward trend of subsequent prices is insufficient.
Combined with subsequent production, export shipments, social inventory consumption and other factors, prices in June may still be in the process of fluctuating upward, but at the same time, they may choose the opportunity to organize and digest, laying a solid foundation for medium- and long-term repair.