Methyl di-p-phenylene isocyanate (MDI) is mainly used in polyurethane foams, which account for about 80% of global consumption. Rigid foams, the largest outlet for MDI, are mostly used in construction, refrigeration, packaging and insulation. Flexible foams are used in furniture, bedding and transportation. MDI is also used to make binders, elastomers, adhesives, sealants, coatings and fibres.
The largest rigid foam outlet for MDI has been in construction use, consuming about 60% of the MDI used in rigid foams in recent years. Major applications are for board and laminate insulation for both residential and commercial construction. Other major rigid foam outlets are for appliance packaging, transportation and industrial insulation for tanks and pipes. The consumption of MDI in appliances has been boosted by the changeover from toluene diisocyanate (TDI) to MDI systems.
MDI is also used in binders for wood, foundry cores and rubber. The major use segment here is for polyurethanes that are used for binding wood chips and flakes into oriented strandboard (OSB) composite panels. OSB is a replacement for traditional plywood in construction jobs, and represents one of the fastest growing end uses for MDI.
Another sector showing strong growth is microcellular products in automotive components. Here, pure MDI is reaction injection moulded (with polyether polyols or amine-terminated polyethers) into car parts such as bumper fascias, body panels, spoilers and exterior trims.
Polyurethane adhesives are used to laminate flexible materials, bond rubbers, textiles and leather as well as bonding metal to metal and metal to rubber and plastics. Polyurethane coatings are used to protect a wide range of surface and objects in infrastructure applications. Solid tyres used on roller blades and skateboards can be made from tough polyurethane parts.
The MDI market is expected to grow at twice the rate of GDP growth with world growth estimated in the range of 6-8%/year. The strongest growth is forecast to be in Asia where it is driven by China at 15%/year. However, with many new projects planned in China, South Korea, Iran and Europe, there is a danger of the market being pushed into overcapacity.
In Europe, future growth is expected to be around 6%/year with the strongest regions being eastern and central Europe. European producers say that demand was healthy in 2007 due to a robust construction sector. Supply has been balanced, helped by exports to China where supply was tight due to technical problems at plants. Players expect a good year again in 2008 as new energy regulations drive demand for insulation, especially in central and eastern Europe.
Capacity has also been growing in Europe. In 2007, BASF expanded its Antwerp, Belgium, plant by 110,000 tonnes/year to 560,000 tonnes/year. Borsodchem is studying a 200,000 tonnes/year project that could start up by 2012. Bayer is also considering a 400,000 tonnes/year plant based on a new process in Europe with start-up in 2012-2013. Dow Chemical is expanding its MDI plant at Estarreja, Portugal and Huntsman is looking at the feasibility of expanding its Rozenburg plant in the Netherlands.
The US market is also expected to experience growth above GDP rates with predictions put at 5%/year to 2009. According to ICB, demand in the US will reach 1.39m tonnes in 2009.
The MDI market in the US had been tight but new capacity started up in 2006 brought some relief. In addition, Dow Chemical is expanding its MDI facility at Freeport, Texas, by 113,000 tonnes/year in two phases with the first increase planned to be completed during 2008.
The Chinese MDI market has been grown strongly. According to China Chemical Reporter, consumption of MDI was 631,000 tonnes in 2006, a 36% increase over 2005. Consumption was expected to reach around 750,000 tonnes in 2007, leaving a supply deficit of over 400,000 tonnes.
Considerable investment is focussed on China where future demand is expected to grow at 15%/year. Much of this demand is being driven by a boom in the footwear, automobile and construction sectors, of which the latter is partly due to the Olympic Games in Beijing in 2008.
Demand could be given a further boost with a new energy policy where buildings have to comply with certain standards. The new policy will take effect from July 2008 in six cities – Beijing, Tianjin, Dalian, Qingdao, Shanghai and Shenzhen.
New projects are planned in China to meet the deficit in capacity. Yanti Wanhua expanded its MDI capacity at Ningbo from 160,000 tonnes/year to 240,000 tonnes/year at the beginning of 2008. Bayer is building a 350,000 tonnes/year plant at Caojing that is due on-stream by 2009. BASF is considering the construction of a 400,000 tonnes/year plant in Chongqing municipality with start-up from 2010 onward.
(Updated: February 2008. Sources: ICB Chemical Profiles, 4 February 2008 and 29 May 2006)
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