MDI demand to outpace capacity growth – US Huntsman

12 February 2013 18:16  [Source: ICIS news]

MDI demand to outpace capacity growth – US HuntsmanHOUSTON (ICIS)--Demand for methyl di-p-phenylene isocyanate (MDI) will likely outpace growth in capacity during the next few years, the CEO of US-based Huntsman said on Tuesday.

World MDI capacity will likely growth by about 300,000 tonnes/year in the next 24 months, said CEO Peter Huntsman, who made his comments during an earnings conference call.

If the industry maintains its 2012 growth rate of 7%, then demand should rise by about 400,000 tonnes/year, Huntsman said. At such a rate, the world will need about 800,000 tonnes/year of new capacity, he said.

"We believe over the course of the next two years or so, you are going to have certainly a tighter market two years from now than you see today," he said.

Already, the industry's utilisation rate is likely in the very high 80% range, Huntsman said.

Looking forward, utilisation rates should rise even further as the industry attempts to meet growing demand, he said.

"We are still quite some distance away in MDI of reaching what I would say would be a peak sort of level of margin performance," Huntsman said. "I'm happy with where we are in MDI, but we still have a ways to go."

MDI is part of Huntsman's polyurethanes segment, which accounted for more than 40% of the company's 2012 revenue.

For all of 2012, revenue for Huntsman's polyurethanes segment reached $4.89bn (€3.67bn), up about 10% from $4.43bn in 2011.

The segment reached $772m in 2012 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), up about 62% from $476m reported for 2011.

($1 = €0.75)

By: Al Greenwood
+1 713 525 2645

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