21 November 2008 16:50 [Source: ICIS news]
LONDON (ICIS news)--The European hydrochloric acid (HCI) market has tightened significantly over the past few weeks due to production cutbacks in toluene diisocyanate (TDI) and methyl di-p-phenylene isocyanate (MDI), market sources said on Friday.
As the global economic crisis has reduced demand for TDI and MDI, particularly from the construction and automotive industries, producers said they have been running operations at lower rates.
Sources estimated that European TDI and MDI production was running at around 60-70% of capacity.
This has led to curtailed production of HCI and reduced output of chlorine derivatives, sources said.
With the reduction in HCI demand declining at a much slower rate than supply, sources said there was an imbalance in the market.
While HCI demand from the steel industry has slowed, sources said there had been no downturn in requirements for water treatment, food, gelatine and power plants.
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Sources noted that the tight supply situation was strengthening producer targets of price increases of €10-20/tonne ($13-25/tonne) for 2009.
With discussions underway, some producers said they were delaying talks until they had a clearer idea of what volumes they would have available next year.
($1 = €0.79)
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