Chinese PMDI market has experienced significant fluctuations during this April and May, with prices initially falling and then rising. On May 30, the reference prices for PMDI in China were as follows: Wanhua goods at CNY 16,400-16,600/tonne, and Shanghai goods at CNY 16,000/tonne， which have almost rebounded to the prices in early April.

Beyond supply and demand fundamentals, recent polymeric MDI market fluctuation was largely influenced by the volatile tariff policies.

In early April, the U.S. announced imposing more tariffs on goods imported from China. The market prices of PMDI as well as its raw materials saw significant declines under bearish market sentiment. From April 20, the negative impact of strict tariff policies on the sentiment across the supply chain had marginally weakened. Meanwhile, several MDI facilities were scheduled to take maintenance during this May to June, which boosted market confidence and ushered recovery momentum. Downstream manufacturers shifted from a wait-and-see approach to active purchasing. With essential restocking before the May Day holiday, both PMDI prices and transaction volumes increased, strengthening the upward momentum.

Following May Day holiday, the market continued its uptrend due to ongoing maintenance activities and supply control from main suppliers.

On May 12, the U.S. and China issued the Joint Statement on U.S.-China Economic and Trade Meeting in Geneva, marking a substantive positive breakthrough in the stalled trade talks between the two countries. On May 14, both China and the U.S. simultaneously lowered tariffs, prompting Chinese downstream manufacturers to actively engage in order fulfillment for exports. Easing tariff policies significantly benefited market fundamentals and enhanced market confidence.

On May 28, the U.S. Court of International Trade ruled that President Donald Trump did not have unilateral authority under the IEEPA to impose tariffs, blocking Trump’s April 2 Executive Order 14257, known as the “Liberation Day” tariffs. The ruling emphasized that tariffs must be “uniform” nationwide, meaning that if the tariffs are illegal for the plaintiff, it is illegal for all parties involved and has nationwide effect. Should the ruling be strictly implemented, all IEEPA tariffs would be canceled, including the 10% or higher universal tariffs imposed on all countries and the “fentanyl” tariffs on China. It also implies that current tariffs on PMDI and its downstream products may be further eased, reducing international trade barriers and getting trade flows back on track.

With a positive outlook, Wanhua Chemical has announced price increases of USD 100/tonne for PMDI and MMDI in Southeast Asia starting June 1. Looking ahead, with possibly limited supply due to frequent maintenance, Chinese PMDI market is forecast to keep steady in June.