Analysis of China MDI Industry and Yantai Wanhua Polyurethanes Co., Ltd, 2008-2009 (2nd Edition)China Market ReportMarch 10, 2009 37 Pages - SKU: CMP2444930 |
| In recent years, China’s MDI production capacity has been a rapid growth, in 2007 the sum of MDI production capacity was 770,000 tons and in 2008 the number reached to over 1.2 million tons, among Shanghai Bayer added extra 350,000 tons, Shanghai SLIC‘s new device with 240,000 tons and Wanhua extra addition 170,000 tons device put on stream. The great increase of production has transformed the structure of China’s MDI supply and demand, from should not self-support to sufficient, market competition become more intense. After Ningbo Wanhua II phase 300,000 tons project put on market in 2010 that China’s MDI production capacity will reach 1.5 million tons, then China will be the MDI supply centre in Asia-Pacific region, supplying for India, Southeast Asia and other markets. Application of MDI in China’s construction thermal insulation field is relatively small, presently it is mainly used in the refrigerator and freezer, and however the next few years the demand for MDI in China market will maintain a growth which will mainly from the building insulation, ACE ( adhesives, coatings and elastomers), automotive industry and composites board, which account for 30%, 22.2%, 3.6% and 0.4% of total China MDI market share respectively, among building insulation and composites board will have a larger growth in the next few years. Consumption of MDI in China in 2008 was 790,000 tons, an increase of 8% year-on-year, among polymerization MDI 480,000 tons, increased 40,000 tons year on year; pure MDI 308,000 tons, increased 18,000 tons year on year. After years of rapid growth, MDI consumption growth rate in China fell from double digits to single digits, the future potential growth engine of MDI consumption is construction thermal, which at moment is still in its infancy with quick growth and small volume, but, however, building thermal will be the largest polymerization MDI application in the future. MDI prices have been continued to fall from early 2008, of which, polymerization MDI prices dropped more than 50%; pure MDI prices fell 37%. The price 11,000 yuan / ton may be the bottom line of polymerization MDI, because of the price between China and overseas is inversion, Bayer Shanghai 350,000 tons device and SLIC 240,000 tons device had out of production, which show that this price is lower that the multi-national corporations’ bottom line. Therefore the price of MDI between China and abroad will be in line, after MDI price rebounding, the downstream industries such as spandex will raise their on-stream rate and the price of MDI will stabilize in a new price level. In 2008, Yantai Wanhua achieved revenues 7.704 billion yuan, down 1.27 per cent year-on-year, operating profit 1.652 billion yuan, a reduction of 30% year-on-year and 1.51 billion net profits for its parent company, an increase of 1.47% year-on-year. Classification by products’ gross margin that pure MDI dropped from 36.47% in 2007 to 35.66% in 2008 and polymerization MDI decreased from 26.85% in 2007 to 20.26% in 2008. In terms of the weak consumption growth in China’s domestic market, in 2009, Yantai Wanhua will focus on the export to increase its sales and plan to increase exports from 70,000 to 150,000 tons. |
