Huntsman expects decision on China MDI expansion by mid-year

17 February 2011 17:37  [Source: ICIS news]

TORONTO (ICIS)--Huntsman expects to make a decision on a big methyl di-p-phenylene isocyanate (MDI) expansion in China by the middle of 2011, executives for the US-based chemical producer said on Thursday.

“We continue to work with the Chinese authorities on environmental and operating permits, and we would hope to cross what I would say would be some crucial decision making later on, perhaps in the middle of this year,” CEO Peter Huntsman said during the company’s 2010 fourth-quarter results conference call.

While Huntsman had announced its intention to expand MDI capacity in China “rather significantly”, the matter was now “largely in the hands of the Chinese government,” he said.

Meanwhile, Huntsman’s MDI capacity in Asia was sold out, the CEO said. He did not comment on capacity levels.

The company had said earlier it was looking at a second MDI plant in China, to be built with partners from its existing 240,000 tonne/year joint venture plant near Shanghai.

Peter Huntsman said once authorities gave permission, it could take some three years before MDI production would start.

He also said the company would keep raising its MDI prices to offset higher raw material costs, in particular for benzene.

“During the [2011] first quarter we will see a margin bite in MDI” because of higher benzene prices, he added.

In related news, Dow Chemical said last week it may pursue MDI projects in China and Saudi Arabia in response to tight supplies.

($1 = €0.74)

For more on Huntsman and other producers visit ICIS company intelligence
For more on MDI visit ICIS chemical intelligence
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By: Stefan Baumgarten
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