China – China’s TDI price more than tripled from August to October 2016, peaking at CNY 50,000 ($7,360)/tonne, and has fallen back to less than 40,000/tonne in nearly November.
The China Plastics Processing Industry Association filed a request on 24 October to China’s National Development and Reform Commission, calling for an investigation on market manipulation.
The request pins China’s TDI demand over the first nine months of 2016 at 480,000 tonnes, supply during the same period at 462,000 tonnes, claiming it’s not a large enough gap for such price change. It also states the product’s current cost is CNY 14,000/tonne, up merely 17% from a year ago.
According to the request, such price surge has caused a number of foam makers to suspend production – some are even selling on their TDI stock – and is seriously impacting downstream sectors such as home furnishing.
“China’s current TDI price is significantly higher than that in Japan, Korea, Europe, the US and Southeast Asia. This damages the competitiveness of [China’s] downstream sector products in the global market,” said the request.
“TDI is a highly monopolized industry and the market is highly manipulable,” the request added. It then names Cangzhou Dahua, the largest Chinese TDI maker with 150kT/year capacity, and points out its stock has rocketed since late September – cresting at 70% up.
Dahua denied such allegations and claimed it had made all disclosures as required. In a statement Dahua said the pause or closedown of TDI plants in Europe and Japan earlier this year as well as the October explosion at BASF’s site contributed to the price hike.
The company’s board secretary, securities affairs representative and head accountant, however, resigned on 28 October.
“Dahua has verified that its TDI pricing is in strict compliance with market rules. Its operation conforms to relevant laws and regulations and it is not manipulating market price. The company has not received any government inquiry regarding such matter,” said its statement on 4 November.
Exchange Rates: Xe.com 7 November 2016.