Europe chemical profile: TDI

13 August 2012 10:58  [Source: ICB]


Toluene di-isocyanate (TDI) is mainly used in flexible polyurethane (PU) foam, which has outlets in upholstery, mattresses and automotive seats.

Other uses include rigid foams and adhesives, paints, concrete sealers, and as a crosslinking agent for nylon 6 and intermediates in PU coatings and elastomers.


European TDI consumption into the main downstream bedding and furniture sectors has held up reasonably well in the first half of 2012, although there is some regional variation. Domestic demand in central and eastern Europe and exports to Russia, the Middle East and Africa continue to perform the best generally due to more underlying growth potential in these regions.

The Mediterranean region, however, ­remains subdued because it has been more ­affected by the economic crisis than the rest of Europe.

Overall European demand has been flat month-on-month in the first half, but is similar, if not slightly better, compared to the same period one year ago.

TDI supply has been tight in the first five months of 2012, driven by a spate of production constraints and strong export opportunities. In June, the European market was balanced to short, but it started to become more balanced in July, following the resolution of production problems. Fewer export opportunities and the seasonal slowdown in demand over the summer have also helped to balance the market.


European TDI contract prices spiked by €420/tonne ($518/tonne) in the first five months of 2012, taking prices to €2,180-2,300/tonne FD (free delivered) NWE (Northwest Europe) in May, driven by tight market conditions and the need to restore profitability amid high feedstock costs.

The significant uptrend in prices at the start of 2012 was in stark contrast to the plummeting prices in the second half of 2011 resulting from the economic turmoil, which limited consumer spending in main downstream sectors such as bedding and furniture.

In June and July, prices largely stabilized, although some selective increases were reported on the sell-side.

In August, prices were agreed stable to softer despite higher costs on the back of seasonally low demand and improved supply.

The August range settled at €2,180-2,270/tonne FD NWE .


The main route is the nitration of toluene to dinitrotoluene, followed by catalytic hydrogenation to toluene diamine (TDA), which is dissolved in an inert solvent and reacted with phosgene to produce a crude TDI solution. TDI can also be produced directly from dinitrotoluene by liquid phase carbonylation with o-dichlorobenzene.

Germany's Bayer Material Science (BMS) has developed a route that carries out phosgenation in the gas rather than the liquid phase. The technology has already been commercialized at its world-scale 250,000 tonne/year TDI plant in Shanghai, China, which came on line last year.

BMS has also been running a 30,000 tonne/year pilot plant since 2004 and plans to use this technology in its new 300,000 tonne/year TDI plant in Dormagen, Germany, which is expected to come on-stream in 2014.


TDI demand is likely to move in line with GDP rates in the mature Northwest European markets, with underlying growth potential driven by rising consumption in central Europe, the Middle East and Africa.

Growth forecasts for these emerging markets over the next five to eight years range between 3-7%/year. Global growth is estimated at 4.5%/year, driven by Asia Pacific.

Plans by BMS and German producer BASF to have two new 300,000 tonne/year plants in operation by 2014 have been prompted by the growth forecasts for these emerging markets.

Other players, however, question whether the additional capacities will be sufficiently absorbed into the European market, despite the companies' plans to replace some of their existing TDI capacities in Germany.

There has been some question mark over whether BorsodChem's new 160,000 tonne/year TDI T2 plant, which came on stream in Kazincbarcika, in Hungary mid-last year, has been running at full rates since its start-up on the back of fragile demand.

BorsodChem also idled its smaller 90,000 tonne/year TDI facility at its Hungarian site in August 2011, following the start-up of its new larger unit, to mitigate the effects of oversupply.

US-based Dow Chemical and Saudi Aramco's Sadara joint venture in Saudi Arabia will include isocyanates and polyols production and the complex is expected to start up in the second half of 2015 or 2016.

Players suggest this new capacity will serve Middle East and African markets. They question the feasibility of any more additional capacity in Europe.

Author: Heidi Finch and Elaine Burridge

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