12 March 2013 18:09 [Source: ICIS news]
LONDON (ICIS)--BASF and Dow Chemical’s methyl di-p-phenylene isocyanate (MDI) facilities in northwest Europe will run at reduced operating rates during March and possibly until the end of April respectively because of ongoing feedstock constraints, according to company sources on Tuesday.
Output at Dow Chemical’s MDI facility at Stade, in Germany, which has capacity to produce 200,000-220,000 tonnes/year has been restricted over the last few months.
Reduced MDI operating rates at Stade are expected to continue until upstream maintenance is carried out at the company’s other site, which is due to take place during April.
“We don't expect any ramp-up at [MDI plant in] Stade until May,” said a Dow source.
BASF’s MDI unit at Antwerp, in Belgium, which has a nameplate capacity of 560,000 tonnes/year and is the largest MDI unit in Europe, has been running at reduced rates since February for upstream related reasons.
In addition, planned maintenance is expected to take place at Huntsman’s MDI operations at Rozenburg in Netherlands in mid-March and which is likely to last for around four weeks. However, this has not been officially confirmed.
The combined MDI capacity at the Dutch site is estimated at 400,000 tonnes/year, according to ICIS plants and projects data.
The European crude MDI market is largely balanced, despite these output constraints, because they are being weighed against ongoing low season demand from the main downstream construction sector.
One manufacturer, however, suggested that the crude MDI market could tighten in March if demand seasonally improves and coincides with both planned and unplanned output constraints at European MDI plants over the next month.
However, some crude MDI buyers said they have not experienced any supply limitations, because demand is low and they question to what extent there will be a seasonal pick-up in consumption – because of the ongoing economic constraints.
One crude MDI customer considers supply plentiful and said that one producer who has been affected by some output constraints is still offering volumes. However, this has not been confirmed at source.
There is some market talk, however, that pure MDI availability is limited, because as a bi-product of MDI manufacturing, its lower yield means that it is more affected by output constraints than for crude MDI.
In addition, consumption for pure MDI is reasonable to seasonally healthy, which is also limiting supply, although one buyer suggested that any constraints where supply rather than demand related.
MDI March settlement information has so far shown rollovers to increases of €20-75/tonne ($26-97/tonne), depending on source and grade. February contract prices were assessed at €2,030-2,150/tonne FD (free delivered) WE for crude MDI and either side of €2,200/tonne FD for pure MDI, according to ICIS.
($1 = €0.77)
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