New TDI capacity may lead to Europe oversupply - BorsodChem CEO

09 June 2011 14:59  [Source: ICIS news]

LONDON (ICIS)--Europe may face a temporary oversupply of toluene di-isocyanate (TDI) by the middle of this decade when two planned worldscale plants come onstream, the CEO of Hungary's BorsodChem said on Thursday.

However, Wolfgang Buchele added that thanks to an arrangement to provide new owner, China's Wanhua Industrial Group, with pre-marketing quantities of TDI, BorsodChem was not worried about its capacity utilisation.

In late May, BASF announced that it was to build the world’s largest single-train TDI plant in Europe, with a nameplate capacity of 300,000 tonnes/year. Scheduled to be operational by 2014, the facility would be located in either Antwerp, Belgium, or Ludwigshafen, Germany.

The market is absorbing this announcement while at the same time factoring in BorsodChem's plan to at least temporarily become Europe's largest producer of polyurethane (PU) feedstock TDI, with the commissioning of its TDI-2 plant in Kazincbarcika, northern Hungary - with an initial capacity of 160,000 tonnes/year - at the end of June.

Bayer MaterialScience also has a project to launch a new 300,000 tonne/year TDI facility in Dormagen, Germany, in 2014.

The company has also announced that it would convert its existing 125,000 tonne/year TDI plant in Brunsbuttel, Germany, into a 220,000 tonne/year methyl di-p-phenylene isocyanate (MDI) facility, thus reducing the net addition of TDI supplies to the market, noted Buchele.

However, he concluded that “overall, there might nevertheless be a temporary TDI oversupply in Europe, with the extent depending strongly on the growth rates for TDI going forward”.

Ralf Guether, head of communications for polyurethanes at Bayer MaterialScience, felt it was too early to say whether there would be oversupply.

The key factor for Bayer MaterialScience would be the price advantages secured by the innovative gas-phase phosgenation (GPP) technology at its new Dormagen plant.

“We will transform the economics of TDI, and a price reduction is in the nature of the beast,” said Guether, noting that its new production process would, for instance, reduce the use of solvents by 80%.

The plant would be a copy of the 250,000 tonne/year TDI facility that Bayer MaterialScience is set to launch in Caojing, Shanghai, China, he added.

Wayne Smith, President of BASF’s polyurethanes division, declined to speculate on possible oversupply.

“BASF expects the global TDI market to grow faster than GDP in the coming years, with strong contribution from central and eastern Europe, the Middle East and Africa. This growth is driven by ongoing urbanisation and increasing standards of living.“

TDI-2 would bring BorsodChem's total TDI capacity to 250,000 tonnes/year, although BorsodChem said it was considering idling its current 90,000 tonne/year TDI plant for an indefinite period following the launch of the new facility.

In a statement, the company said this was “due to the unfavourable raw material cost evolution”.

For more on TDI visit ICIS chemical intelligence
For more on BorsodChem visit ICIS company intelligence

By: Will Conroy
+44 20 8652 3214

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