On December 31, 2024, China’s PMDI market closed at a range of CNY 18,100-18,300/tonne, reflecting a remarkable increase of CNY 2,800/tonne (+18.2%) compared to the range of CNY 15,300-15,500/tonne at the end of December 2023. The average price of PMDI in China in 2024 stood at CNY 17,200/tonne, remaining basically same with the yearly average in 2022. The market price in 2024 indicated an upward trend. In December, as most suppliers had completed sales targets and halted or reduced deliveries, PMDI supply remained tight. Many distributors had no stock nor quotations, awaiting shipments from suppliers in the upcoming month.
In Supply Side
In 2024, PMDI suppliers’ pricing strategies and inventory management practices maintained PMDI social stocks at low levels.
In February, global oil prices increased during the Chinese New Year holiday, then China benzene market followed to increase, leading to increased PMDI production costs, pushing major MDI suppliers to raise list prices, then distributors followed to increase their quotations.
However, in late February, sudden severe cold weather across several regions in China delayed resumption of production and procurement for raw materials including PMDI in downstream sectors, leading to insufficient support for PMDI price increases. PMDI prices moved down in March.
In April, as it turned warmer, demand picked up gradually in construction sectors. but PMDI supply was relatively slow, leading to further depletion of spot inventories and a rebound in PMDI prices.
The uptrend continued during May and mid-June.
The market faced a marginal retreat due to off-season factors towards the end of June until August, and picked up again from September onwards.
In November and December, the price stabilized in the range of CNY 18,000-18,500/tonne.
In Demand Side
The downstream sectors for PMDI include home appliances, building insulation, cold chain logistics, transportation., etc. Home appliance is currently the largest downstream sectors of PMDI demand markets in China. Thanks to trade-in policies and leading home appliance companies’ ambitious actions on exploring overseas markets, both domestic sales and exports of refrigerators in China saw unexpected growths in 2024, contributing to ongoing increases in refrigerator production. The growth in international trade, the upturn in container shipping segment and incidents like Red Sea Crisis brought substantial orders for Chinese reefer container and LNG carrier manufacturers. In addition, Chinese PMDI exports from January to November 2024 rose by 11.5% year on year.
Looking ahead to 2025, suppliers’ pricing and inventory management are expected to maintain stable support to the market. In terms of demand, China set top of key tasks for 2025 at the Central Economic Work Conference as “vigorously boosting consumption, improving investment efficiency and expanding domestic demand on all fronts”. The conference prioritized supporting expanding domestic demand, particularly in consumer demand, which in turn will have a positive effect on industries like automobiles and home appliances. Furthermore, as 2025 marks the conclusion of China’s 14th Five-Year Plan (2021-2025), most market participants are observing the support given by the national and local governments in infrastructure projects. Despite market concerns about the risks associated with U.S. tariffs, which may impact on PMDI prices and export business of PMDI-based products from China to the U.S., Chinese PMDI market is projected to continue its upsurge driven by bullish factors in both supply and demand sides.
