Summary of Key Takeaways from the Conference Call on the China Chemical Sector Industry Overview - **Industry Focus**: China Chemical Sector, specifically MDI (Methylene Diphenyl Diisocyanate), refrigerants, electrolytes, and TiO2 (Titanium Dioxide) [2][3][4][5] MDI (Methylene Diphenyl Diisocyanate) - **Price Trends**: pMDI prices have decreased year-to-date (YTD), averaging Rmb15,986/t, down 6% YoY, with a forecast range of Rmb14,500-16,000/t for 2026 [8][11] - **Supply Dynamics**: Expected capacity additions in 2026 include Wanhua (700ktpa), BASF (160ktpa), and Covestro (40ktpa) [9] - **Demand Outlook**: Modest domestic demand growth anticipated in 2026, with a projected consumption growth of 2-6% for major downstream applications [10] - **Export Challenges**: Exports expected to decline to ~0.8mt in 2025, primarily due to reduced shipments to the US [10] Refrigerants - **Pricing Divergence**: Significant price variations observed YTD, with R32 and R134a prices increasing by 57% and 47% YoY, respectively, while R22 prices fell due to weak demand [12][15] - **Future Price Projections**: R32 and R134a prices expected to reach Rmb69,500/t and Rmb63,500/t by end-2026, respectively [14] - **Demand Risks**: Potential downside risks from new air conditioning demand and increased overseas capacity, particularly in India [15] Electrolytes - **Supply-Demand Balance**: Anticipated moderation in supply-demand imbalance for LiPF6 in 2026, with a price range forecast of Rmb80,000-90,000/t [16][17] - **Capacity Growth**: Expected capacity growth of 6.8% in 2026, with a slowdown to ~5.4% CAGR from 2026-2030 [17] - **Additives Pricing**: Significant price increases for electrolyte additives noted, with vinylene carbonate rising to Rmb108,000/t [18] TiO2 (Titanium Dioxide) - **Market Conditions**: Domestic TiO2 producers facing losses due to oversupply and high costs, with average prices projected to decline 3% YoY to Rmb13,500/t in 2026 [5][23] - **Capacity Additions**: Anticipated new capacity of 1.12mtpa in 2026, with 200ktpa expected to come online early in the year [21] - **Export Recovery**: Mild recovery in TiO2 export volumes expected, driven by global demand growth and potential changes in India's anti-dumping policies [22] Additional Insights - **Risks in the Chemical Sector**: Key risks include price volatility due to fluctuations in oil prices, macroeconomic uncertainties affecting demand, and rapid capacity expansions leading to oversupply [24] - **Analyst Insights**: The opinions expressed by experts do not necessarily reflect the views of UBS, and the firm disclaims responsibility for the accuracy of the information provided [7]