TDI, also known as toluene diisocyanate, is a colorless, transparent or slightly yellow liquid that is an organic compound with a strong irritant gas. TDI is one of the most important diisocyanate raw materials for polyurethane resin. 70% of TDI is used to prepare polyurethane soft foam and its products, while the rest is used in coatings, sealants, elastomers, etc.
| Gamma-PGA (gamma polyglutamic acid) |
2023 TDI price trend
According to the Commodity Market Analysis System of Business Society, the TDI market experienced a wide range of fluctuations in 2023, with a significant decline in price trends. At the beginning of the year, the average TDI market price was 18800.00 yuan/ton, and at the end of the year, the average price was 16800.00 yuan/ton. Within the year, the price decreased by 2000 yuan/ton, a decrease of 10.64%. The highest point of the annual price was 20966.67 yuan/ton in early February, and the lowest point was 16000.00 yuan/ton in early June, with a maximum amplitude of 23.69% within the year.
2023 TDI Market Review
The price trend of TDI in 2023 is fluctuating and falling, which can be roughly divided into three stages:
From January to March, TDI prices first rose and then fell. As January approaches the Spring Festival holiday, downstream stocking demand increases, and TDI prices rise. After the year, downstream terminal production resumes, sponge prices rise, and demand is positive for the TDI market. In addition, the decrease in overseas TDI market production capacity leads to an increase in export demand. Supported by multiple positive factors, TDI prices have risen strongly to the highest level of prices this year; Starting from mid to late February, the enthusiasm for terminal procurement has weakened, downstream demand has been weak, market inquiries have been sluggish, suppliers have been reluctant to raise prices, and TDI prices have fluctuated downward.
From April to May, the price trend once again showed a trend of first rising and then falling. The supply of goods in the TDI market is filling slowly, and prices are constantly rising. In addition, the news of the restart of the Gansu Yinguang device and the expected start of the Fujian Wanhua device have failed, exacerbating the tight spot situation. Suppliers have released news of support for the market, and the trade market follows the guidance of the news. TDI offers continue to rise; Afterwards, the market saw a bearish atmosphere and the TDI price plummeted.
From June to December, the TDI market showed an M-shaped oscillation. At this stage, TDI prices maintain a range of fluctuations, and there is a clear supply-demand game on the market. Supplier’s device load reduction, shutdown and other messages are released, and TDI quotation is raised; The maintenance equipment has been restarted, the supply of goods has entered the market, and the demand side has gradually taken the lead, resulting in a decrease in TDI prices; Afterwards, market trading increased, and suppliers supported the market and rose; As demand weakens and the terminal market enters the off-season, trading is weak, and TDI prices are simultaneously decreasing.
Fundamental analysis
Supply side:
In terms of supply, domestic production capacity continued to increase from 2018 to 2022, with a synchronous increase in production. In 2022, production weakened compared to the previous year. By 2023, Gansu Yinguang, which had been parked for a long time, resumed operation, and TDI supply increased again, with an operating capacity of 1.48 million tons.
From the global distribution of TDI production capacity, China has the largest TDI production capacity, followed by Europe and the Americas. High production capacity also means that China’s TDI exports account for a relatively large proportion.
Demand side:
From the comparison chart of TDI production and apparent consumption from 2018 to 2023, it can be seen that the domestic TDI apparent consumption is much lower than the annual production, and the TDI external dependence is relatively low. In 2023, TDI apparent consumption increased by 8.3% year-on-year, while self-sufficiency rate decreased by 0.32% compared to the previous year.
Import and export:
China is a net exporter of TDI. In recent years, China’s TDI production has steadily increased, and its export volume is also further increasing. From the TDI import and export data from 2017 to 2023, it can be seen that China’s TDI export volume far exceeds its import volume, and the import volume is showing a downward trend. In 2023, China exported a total of 250500 tons of TDI products, a year-on-year decrease of 24.91%. Exports continued to decline compared to previous years, which is closely related to the weak demand in recent years.
Future market forecast
In summary, the expected production capacity of TDI in 2024 may increase, and the demand side has not changed much compared to this year. The maintenance and restart of TDI equipment by suppliers in 2024 may be the main factors affecting price changes. Based on the supply and demand game on the market, it is expected that the TDI market prices will continue to fluctuate weakly in 2024.
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