European/American MDI market review during last December and January

American markets

During the Chinese Spring Festival, North-American material markets were steady. However, the current MDI price went down 10 cents per pound in average, enforced by the price decline in the last fourth quarter.

After the strong quotations for several consecutive months, MDI price had slight decline, pressed by poor demand, which to some extent eased the buyer' markets. However, some buyers are concerned about whether this declining trend will stand or not. Even in this slumping situation, MDI market price in America is still relatively higher than that of other areas, thus buyers anticipate that this descending trend can last February.

European market

Since last November, MDI makers have closed out substantially. Suffered from this, MDI price in the first ten-day period of January began to fell by Euro150-180/t. In addition, the crude MDI and pure MDI price both were slipping by 10%-15% compared with the contract price of last fourth quarter.

For the moment, makers have suspended their close-out activity because of slightly increasing orders from clients. However, the markets do not warm up completely and market players are prudent for the future markets, hoping for recovery in March and April.

European MDI sectors continue to maintain low operation rates because of weak demand. Some buyers point out that MDI supply in the fourth quarter of 2008 was lower 60% year-on-year.