Covestro declares force majeure on MDI, TDI in Europe, 'significant' delivery delays

07 October 2016 11:17 Source:ICIS News

LONDON (ICIS)--Covestro has declared force majeure on production of methyl di-p-phenylene isocyanate (MDI), toluene di-isocyanate (TDI) and intermediate products production in Europe, effective 6 October, a spokesperson for the Germany-headquartered firm said on 7 October.

"Due to an unforeseeable production issue at its nitric acid supplier, Covestro’s production plants in Europe can currently only be operated with reduced capacity," said the spokesperson. 

"The missing nitric acid quantities cannot be compensated through purchases from other suppliers. Covestro therefore predicts significant delivery delays for all affected TDI and MDI products, including their intermediates." 

Covestro currently cannot predict how long this force majeure will continue.

Covestro operates three MDI plants in Europe. A 170,000 tonnes/year facility in Tarragona, Spain, a 200,000 tonnes/year plant in Brunsbuttel, and a 200,000 tonnes/year unit in Krefeld, as well as a 
300,000 tonnes/year TDI plant in Dormagen, the three in Germany.

"If Covestro declares FM [force majeure], all I can say is 'fasten your seatbelt'," said a TDI distributor, reacting to the news.

"I do believe the MDI price will go up," said a Middle Eastern source.

"I don't know what's going on, things are moving too fast. I know it's supposed to be a dynamic market but this is too dynamic for my liking," it added.

TDI is already short in Europe as market players await the ramp-up of production at BASF's 300,000 tonne/year plant at its Ludwigshafen headquarters.

By Ben Lake