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Analysis of China MDI Industry and Yantai Wanhua Polyurethanes Co., Ltd

China Market Report
April 13, 2008
34 Pages - SKU: CMP2073219

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In recent years, global MDI capacity has a rapid expansion, reached 4.826 million tons in 2007, a compound annual growth rate over 20 per cent. Global MDI production capacity mainly concentrated in Europe and the United States. In 2007, the United States accounted for 30 per cent of the global production capacity, Europe accounted for more than 40 percent, while China MDI production capacity accounted for only 14 per cent.

BAYER, BASF and Wanhua are the main China polymerization MDI suppliers, MITSUI, NPU are taken small part of the supply. Polymerization MDI supply in China has been continuing to grow; domestic suppliers provided 38 per cent of total supply in 2007. However, due to the downstream of products of MDI maintained a rapid growth, therefore, the balance between supply and demand will not change rapidly in a short-term in China. From 2000 to 2007, the consumption of MDI had a compound annual growth of 21%; meanwhile, the expectation of MDI consumption will be a 13 per cent growth in next few years.

The main downstream of products of pure MDI are synthetic leather paste, soles solution and polyurethane, which are accounted of pure MDI consumption 35%, 23%, 16% respectively. In terms of the growth of each product, and consideration of TPU and adhesives, the demand of pure MDI in China is expected to growth 10-12% roughly in 2008

The major cost of MDI is aniline. The oversupply of aniline has revealed in the global and domestic markets.

Yantai Wanhua is the largest MDI manufactory in Asia-Pacific region. It made 337,400 tones of MDI in 2007, an extra 92,000 tones than 2006. Yantai Wanhua is the main supplier, providing 33.6 per cent of MDI in domestic market.

In 2007, Yantai Wanhua made 1.481 billion yuan of net profit, rose 71.56 percent year-on-year; the gross profit margin of Pure MDI and Polymerization MDI were 50.50 percent and 40.68 percent respectively, a slightly growth than 2006; it also made 1.508 billion yuan of overseas sales, an increase of 86.6 percent year-on-year, it accounted of the total income rose to 19.32 percent.

The MDI production capacity of Yantai Wanhua is planned around 500,000 tons in 2008, MDI output of 400,000 tons, MDA output of 8,500 tons and TPU output of 13,000 tons.

1 The brief of MDI and industrial chain: 1.1 Introduction of MDI; 1.2 MDI industrial chain
2. Global MDI industry: balance between supply and demand: 2.1 Supply; 2.2 Demand
3 Chinese MDI industry: 3.1 The market of polymerization MDI; 3.2 The demand of pure MDI
4. The supply, demand and price of raw materials
5 Yantai Wanhua: 5.1 Brief of Yantai wanhua; 5.2 Performance; 5.3 Expansion of production capacity; 5.4 Analysis of price; 5.5 Operating strategy
Charts: Figure: MDI industrial chain; Figure: Global capacity growth between 2000 and 2010; Figure: The distribution of global MDI production capacity; Figure: Global supply and demand of MDI and forecast; Figure: The demand and growth of domestic MDI between 2001 and 2009; Figure: The price of MDI in China market between 2005 and March of 2008; Figure :The forecast of China polymerization MDI production capacity; Figure: China's consumption market of polymerization MDI; Figure: The market share of polymerization MDI supplier in 2007; Figure: The output and growth of light leather between 2003 and February of 2008; Figure: The output and growth of paste between 2003 and 2007; Figure: The output and growth of leather shoes between 2003 and February of 2008; Figure: The output and growth of sole solution between 2003 and 2007; Figure: The output and growth of polyurethane between 2003 and 2007; Figure: The ex-works price of aniline in East China; Figure: The ex-works price of methanol in North China; Figure: The market price of caustic soda in East China; Figure: The ex-works price of liquid chlorine in East China; Figure: The equity structure of Yantai Wanhua; Fifure: The operating revenue and gross profit ratio of Yantai Wanhua between 2001 and 2007; Figure: The composition of main business income of Yantai Wanhua of 2007; Figure: The composition of main business profits of Yantai Wanhua of 2007; Figure: The expansion of MDI production capacity of Yantai Wanhua expansion; Figure: The price of MDI product of Yantai Wanhua; Table: The capacity and expansion of MDI manufacturers between 2006 and 2010; Table: The balance of domestic supply and demand of polymerization MDI between 2005 and 2007

Analysis of China MDI Industry and Yantai Wanhua Polyurethanes Co., Ltd

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