2019 Polyurethane Additives Research Report

2019 MDI whole industry chain big events

1

In 2019, the global economy is running weak, and the Organization for Economic Cooperation and Development (OECD) had lowered its forecast for global economic growth from 3.2% to 2.9% in September, which is the low level of the forecast in the past decade; the International Monetary Fund (IMF) forecast for global economic growth in 2019 is also only 3%.

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

2

The U.S. and China went through several rounds of trade consultations in 2019, during which the U.S. side’s attitude repeated several times. in May, the U.S. side raised the tariff on $200 billion of Chinese goods exported to the U.S. from 10% to 25%; in June, China’s tariff increase on some goods from the U.S. also went into effect. in August, the U.S. side even threatened to impose additional tariffs on $300 billion worth of Chinese goods exported to the U.S., which was later postponed for some reason. Finally as of November 2019, a spokesman for the Ministry of Commerce said the Chinese and U.S. leads had serious and constructive discussions on properly addressing their core concerns and agreed to phase out the tariff increases 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 combination 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 foam and combination polyethers by headspace/gas chromatography-mass spectrometry (HJ 1057-2019) and Determination of HCFC-141b and other ozone-depleting substances by portable headspace/gas chromatography-mass spectrometry” (HJ 1058-2019), which has been implemented since October 31, 2019, provides specific technical support for the special action of ozone-depleting substances (ODS) enforcement.

4

Wanhua Chemical suspends 400,000 t/a MDI project in Louisiana, U.S. but does not abandon U.S. market: September 2019: Wanhua Chemical has suspended its investment in a 400,000 t/a MDI project in Louisiana, U.S., according to foreign media reports. Wanhua Chemical’s U.S. business manager said the reason for suspending the 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 the project when the time is right.

5

Wanhua Chemical acquired “Swedish International Chemical”: In July 2019, Wanhua Chemical (Hungary) Holdings Limited, a wholly-owned overseas subsidiary of Wanhua Chemical Group Co. (hereinafter referred to as “Cornell”) and Euro-American Energy Technologies Limited, which held 100% equity interest in Chematur Technologies AB (hereinafter referred to as “Swedish International Chemical”).

6

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

 

7

The average RMB market price of polymerized MDI in the domestic market fell by about 32.0% year-on-year from January to October 2019, with market prices falling rapidly after rising to RMB 18,000/mt in March-April and then oscillating around RMB 12,000/mt to date. The average RMB market price of pure MDI in the domestic market also dropped by about 31.7% year-on-year.

8

January-September 2019 auto production and sales completed 1814.9 and 1837.1, respectively, with production and sales down 11.4% and 10.3%, respectively, compared with the same period in 2018 and down 10.9% and 7.8%, respectively, compared with the same period in 2017.

9

From January to September 2019, the 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 sales area of commercial properties decreased by 0.1% year-on-year and the cumulative housing completion area declined by 8.6% year-on-year.

10

National refrigerator production increased by 3.3% year-on-year and freezer production increased by 8.8% in January-September 2019.