TDI market preview in this week

Late June and early July will be the most important periods for TDI markets. Leading suppliers will announce series of price strategies this week. BASF will issue its contract price in July; Korean suppliers also set the July USD quotations; meanwhile, Japanese Mitsui will clear up its market strategy in early July after its resumptions.

In light of current downstream clients’ attitudes, northern clients are opposite to the prices of above RMB 23500/t. Despite of tight supply appearing this weekend, it is not the feedback of strong demands from downstream sectors, but the strategy of sellers and panic of downstream clients.

Concerning domestic TDI factories, excluding Gansu Yinguang TDI facility beginning turnaround in the middle of this month, other facilities keep regular operation. It is expected that domestic supply will be steady this week, as well as the prices in the north.

In the east, since most BASF and BAYER distributors have completed the contracted stocks at the end of June with no inventory pressure now, they are not likely to undersell stocks. Most traders will choose to raise quotations to wait for the clear market trends.

In the south, TDI struggle issues cannot be eased temporarily; therefore, the transactional supplies are limited, which do not indicate that it will last for a long time. To tackle this situation, most clients will absorb inventories to go through current “hard time”.

In a short, sellers will keep stable quotations or increase slightly; even so, downstream clients are not willing to buy in. The local tight-supply situation will last for 5-10 days. Therefore, PU daily consultant suggests that downstream clients should not pursue the high prices.