Many markets soften as year end approaches

摘要

Global political issues and lower expected economic growth continue to affect the isocyanates markets.Most areas have seen degrees of softening as we move towards quarter four.The MDI market in North America continues to be afflicted by long supply and slower-than-expected demand,but prices are reportedly going up anyway in an attempt by producers to recover margins.Given the current situation,there was a degree of surprise when price increase announcements started to take place around September.Relations between the US and China because of the trade war are affecting MDI trade volumes between the two countries,and the US is already seeing a reduction in its imports of MDI.In the future,a drop in Chinese MDI moving into the US is also expected by market players as the 25 tariff makes product uncompetitive.Coupled with potential reduction in imports,the news that Wanhua Chemical will be reviewing the scope for the new MDI plant that was meant to be built in the US is worrying for market players(See page 23 for more details).The plans for a new MDI plant were announced in November 2018 and Convent,Louisiana was chosen as the location for the project.The announcement suggests the location is now also under review,but it will remain in the US.Wanhua announced that increases in capital expenditure are the reason for the step-back,but some players believe it could be a result of the ongoing trade war between the US and China.The US market is expected to grow at about 4-5 over the next five years,and a new world-scale plant per year is needed to meet the growing demand.