Producers of methylene diphenyl diisocyanate (MDI) caution that Europe may face a shortage of the polyurethane intermediate because capacity has failed to keep up with demand. Europe consumes around 900,000 tons of MDI per year, making it the world's largest market, according to Huntsman Polyurethanes. European demand for MDI is growing by around 7 or 8 percent per year.
"There could be general shortages of MDI later this year, but it will first show up in Europe," warns Patrick Thomas, president of Huntsman Polyurethanes.
"Everyone is continually surprised by the strong growth of MDI. The highest growth at the moment is in Asia, but there is still very solid growth in the world's biggest market."
The pressure on MDI in Europe could reverse the region's role as an exporter to North America and other markets.
"We have been importing MDI into the US from our capacity in Europe," says William Bernstein, group vice-president for urethanes at BASF Corporation, which will open a 140,000-ton-per-year MDI plant in Geismar, La., later this year.
"There could be a reversal of that trend after we bring on our new MDI unit at Geismar, so that we will be exporting MDI from the US to Europe as well as Asia. For a while, there will be a tremendous amount of extra capacity available in the US."
But Bayer cautions that there will be a global deficit in MDI capacity for a few years because an insufficient number of new plants are being built. As a result, polyurethanes may lose market share to competing materials, says Reinhard Clausius, Bayer's marketing director for polyurethanes.
Huntsman is planning a series of debottleneckings at its 160,000-ton-per-year MDI plant in Rozenburg, the Netherlands, which could raise that site's capacity to as much as 240,000 tons per year.
To meet future demand, the company wants to rely on a new joint-venture plant with BASF in Shanghai, China, which is in the early stages of engineering and construction, rather than building another new plant elsewhere.