29 March 2011 00:08 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--The global market for methyl di-p-phenylene isocyanate (MDI) is poised to tighten over the next two years, the CEO of US-based producer Huntsman said on Monday.
“With growth rates in China exceeding 10%/year, we need one new worldscale MDI facility of 300,000-400,000 tonnes/year every 10-12 months,” said president and CEO Peter Huntsman, on the sidelines of the International Petrochemical Conference (IPC).
“In the next 3-4 years it will likely be us and BASF coming on line, but in the next 2 years, there’s nothing,” he added.
Huntsman plans to build a 240,000 tonne/year MDI plant in Caojing, near Shanghai, China, as earlier reported by ICIS. Huntsman is awaiting government approval, which it expects “within weeks to months”, Huntsman said.
The plant would take about three years to complete from the time of approval, he added.
Huntsman already operates a 240,000 tonne/year MDI plant at the site.
US-based Dow Chemical chairman, president and CEO Andrew Liveris mentioned on the company’s fourth quarter conference call in February that it could build MDI facilities in Saudi Arabia and China, but did not give any time frames.
“We are essentially sold out in Asia and Europe, with some spare capacity in North America which is being shipped to China,” Huntsman said.
In baseball terms, with the 9th inning being the peak of the cycle, “MDI is in the 4th inning,” he noted.
“We have quite a bit more improvement to go. We are currently at 40-50% of the peak margins we saw in 2005-2006, and we think we are likely to achieve those margins in the coming years,” Huntsman said.
Demand for MDI is being driven by insulation in construction, automotive applications, synthetic leather for footwear and growth in the adhesives, coatings and elastomers market, he said.
The company is not seeing any major impact on its business from the disruptions in the auto market stemming from the 11 March earthquake and tsunami in Japan, Huntsman said.
“We are a large supplier for the China and European automotive market, but not for Japan. And we haven’t seen any broad impact from disruptions in Japan to auto markets in China, Europe and the US,” he said.
Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.
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