2019 Polyurethane Additives Research Report

Major events in the entire MDI industry chain in 2019

1

In 2019, the global economy is operating weakly. In September, the Organization for Economic Cooperation and Development (OECD) lowered its forecast for global economic growth from 3.2% to 2.9%, which is the lowest level predicted in the past decade; international currency The IMF’s forecast for global economic growth in 2019 is only 3%.

In March 2019, the Chinese government work report stated that China’s GDP growth target for 2019 was between 6.0-6.5%. According to actual data from the National Bureau of Statistics, China’s GDP grew by 6.2% year-on-year in the first to third quarters of 2019, with single-quarter GDP growth falling from 6.4% in the first quarter to 6.0% in the third quarter.

2

China and the United States went through multiple rounds of trade negotiations in 2019, during which the US attitude changed many times. In May, the United States increased tariffs on $200 billion of Chinese goods exported to the United States from 10% to 25%; in June, China also began to impose additional tariffs on some U.S. goods. In August, the United States even threatened to impose additional tariffs on US$300 billion worth of Chinese goods exported to the United States, but then postponed the tariff for some reason. Finally, as of November 2019, a spokesperson for the Ministry of Commerce stated that leaders from China and the United States had serious and constructive discussions on properly resolving their respective core concerns, and agreed to gradually cancel the additional tariffs in phases as the agreement progresses.

3

In October 2019, the Ministry of Ecology and Environment issued two national environmental protection standards: “Determination of ozone-depleting substances such as HCFC-22, CFC-11 and HCFC-141b in combined polyethers by headspace/gas chromatography-mass spectrometry” ( HJ 1057-2019) and “Determination of ozone-depleting substances such as CFC-12, HCFC-22, CFC-11 and HCFC-141b in rigid polyurethane foams and combined polyethers – Portable headspace/gas chromatography-mass spectrometry” (HJ 1058 -2019), which has been implemented since October 31, 2019, and provides specific technical support for special actions on ozone depleting substances (ODS) law enforcement.

4

Wanhua Chemical has suspended the 400,000 tons/year MDI project in Louisiana, the United States but has not given up on the U.S. market: September 2019: According to foreign media reports, Wanhua Chemical has suspended the 400,000 tons/year MDI project in Louisiana, the United States. Project investment. The U.S. business manager of Wanhua Chemical said that the reason for suspending investment is the rising cost of capital, but the company has not given up on the U.S. market and will consider continuing to invest in this project when the time comes.

5

Wanhua Chemical acquires “Swedish International Chemical”: July 2019: Wanhua Chemical (Hungary) Holdings Co., Ltd., a wholly-owned overseas subsidiary of Wanhua Chemical Group Co., Ltd. (hereinafter referred to as “Wanhua Chemical”), acquired Jilin Chematur Technologies AB (hereinafter referred to as “Swedish International Chemical”) is 100% owned by Cornell Investment Group Co., Ltd. (hereinafter referred to as “Cornell”) and European and American Energy Technology Co., Ltd.

6

September 2019: Huntsman announced that the company and its affiliated joint venture Rubicon are considering a multi-phase expansion of its Geismar polyurethane plant in the United States worth at least US$270 million. The Geismar plant primarily produces methylene diphenyl diisocyanate, also known as MDI. About 80% of the chemicals produced at the plant are sold in North and South America, with the remaining 20% ​​exported elsewhere. The factory expansion project will begin in January 2020 and end in 2023.

7

The average RMB market price of aggregated MDI in the domestic market from January to October 2019 fell by about 32.0% year-on-year. The market price rose to 18,000 yuan/ton in March-April and then fell rapidly, and then fluctuated around 12,000 yuan/ton until now. . The average RMB market price of pure MDI in the domestic market also fell by about 31.7% year-on-year.

8

From January to September 2019, automobile production and sales completed 1814.9 and 1837.1 respectively. Production and sales decreased by 11.4% and 10.3% respectively compared with the same period in 2018, and decreased by 10.9% and 7.8% respectively compared with the same period in 2017.

9

From January to September 2019, national real estate development investment increased by 10.5% year-on-year, and the housing construction area increased by 8.7% year-on-year; however, at the same time, the commercial housing sales area decreased by 0.1% year-on-year, and the cumulative housing completion area fell by 8.6% year-on-year.

10

From January to September 2019, national refrigerator production increased by 3.3% year-on-year, and freezer production increased by 8.8%.