Price and market trends: BASF and Dow to run MDI plants in Europe at reduced rates

22 March 2013 09:23  [Source: ICB]

Facilities in northwest Europe to run at reduced rates during March and April on lack of feedstock

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.

Output at Dow Chemical's MDI facility at Stade, 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, scheduled for April.

"We don't expect any ramp-up at [the MDI plant in] Stade until May," said a Dow source.

BASF's unit at Antwerp, Belgium, whose nameplate capacity of 560,000 tonnes/year makes it the largest MDI unit in Europe, has run at reduced rates since February, for upstream-related reasons.

Planned maintenance is also expected at Huntsman's MDI operations at Rozenburg, the Netherlands, in mid-March for around four weeks. However, this has not been officially confirmed.

The combined MDI capacity at the Dutch site is estimated by ICIS at 400,000 tonnes/year.

The European crude MDI market is largely balanced, despite these output constraints, as they are being weighed against ongoing low season demand from the main downstream construction sector.

One manufacturer, however, suggested 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 the extent of any seasonal pick-up in consumption - given the ongoing economic constraints.

One crude MDI customer considers supply plentiful and said one producer affected by some output constraints is still offering volumes. However, this has not been confirmed at source.

There is some talk, however, that pure MDI availability is limited, because as a by-product of MDI manufacturing, its lower yield means it is more affected by output constraints than crude MDI.

Consumption for pure MDI is reasonable to seasonally healthy. MDI March settlement information has so far shown rollovers to increases of €20-75/tonne ($26-97/tonne).

By: Heidi Finch
+44 20 8652 3214

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