<b>year-end summary: a brief introduction to the development of china’s mdi market in 2021</b>

2021 is the first year of china’s “14th five-year plan”, and it is also the it is a critical year for production and production activities to return to the right track. while continuing to do a good job in the “six stability” work and trying to keep the economy operating within a reasonable range, the chinese government also pays attention to supply-side structural reform and medium- and long-term sustainable development. in terms of the global macro environment, many factors that are different from previous years, such as the global central bank’s large-scale release of water, the spread of the delta variant strain, and the soaring price of natural gas, have brought more uncertainties to the global economic recovery process in 2021. during this year, the prices of various bulk raw materials at home and abroad have “increased”, leading to a common increase in the pressure on the production costs of the mid-stream manufacturing industry. in contrast, the price trend of china’s mdi market in 2021 will “rise first and then decline”. from the perspective of domestic demand, the overall consumption has maintained growth this year, some industries, such as shoe sole liquid and slurry, have recovered and rebounded from the negative impact of the 2020 epidemic, and some industries, such as cold chain and wood-based panels, have grown significantly. it is worth mentioning that due to the unstable operation of overseas mdi production equipment in the first three quarters of 2021, the mdi export volume of chinese, japanese and korean manufacturers has increased significantly year-on-year. the following briefly reviews the global and chinese mdi supply and demand in 2021.

global mdi supply
in 2021, the global mdi new/expanded production capacity will be put into operation with 700,000 tons/year, and the total production capacity will reach 9.74 million tons/year. in terms of regions, more than half of the world’s production capacity is concentrated in asia (accounting for 52%), 27% of production capacity is in europe, and 17% of production capacity is in the americas.

in terms of manufacturers, there are 8 mdi manufacturers in the world. among them, the combined production capacity of chemical, , , and accounts for 91% of the total production capacity.

in the next five years, with the completion and commissioning of more capacity under construction or planning, by 2026, the global mdi capacity is expected to reach more than 11 million tons per year.

china mdi supply and import
as of the end of 2021, china’s mdi production capacity will total 4.01 million tons per year, and the industry’s average operating rate will be around 90%. according to the calculation and calculation of mdi import and export data released by china customs from january to october 2021, it is estimated that in 2021, china’s mdi import volume will be around 400,000 tons (including japan’s mdi mother liquor), and china’s mdi export volume will be around 1.15 million tons.

mdi consumption in china
in 2021, the apparent consumption of mdi in china will increase slightly. in comparison, the consumption growth rate of pure mdi is higher than that of aggregated mdi.
in 2021, china’s pure mdi consumption will increase by around 15% year-on-year. in 2021, the growth rate of the two traditional nstream industries of shoe sole liquid and slurry will be higher than the overall average. the growth rate of consumption from tpu and spandex is about 10%. with the further increase of industry concentration and the commissioning of newly expanded production capacity, the consumption from spandex and tpu industry is expected to continue to grow in the next few years.

in 2021, the consumption of polymeric mdi in china will increase slightly year-on-year. the main nstream industries of domestic polymeric mdi, such as home appliances (refrigerators, freezers, water heaters) and automobile manufacturing, have experienced steady year-on-year output; cold chains (cold storage panels/cold storage spraying, refrigerated containers and refrigerated trucks) and wood-based panel industries have developed relatively rapidly. the demand for lumber from farms fell year-on-year.