Major MDI capacity expansions not warranted for next few years – Huntsman

HOUSTON (ICIS)–No major capacity expansions on methylene diphenyl diisocyanate (MDI) are expected this year or in 2021 and current economic conditions do not support additional capacity in the industry, Huntsman executives said in a Tuesday earnings call.

Huntsman said that demand for MDI has fallen significantly due to the coronavirus crisis, although consumption levels are improving as of the end of the second quarter.

Huntsman anticipates that demand will continue to pick up in the third quarter from the low points seen during the beginning of the second quarter, although sales of MDI and polyurethane systems are still expected to be 7% lower year on year in Q3.

“We may seek to grow our capacity incrementally over the next few years, but do not currently plan any major expansions,” CEO Peter Huntsman said.

Huntsman is in the process of building a new MDI splitter for use at its Geismar, Louisiana, MDI plant. The splitter is expected to come online in the middle of 2022.

The splitter will not raise the capacity of the plant, but will allow Huntsman to offer more differentiated grades of MDI to the market.

Thumbnail image shows spray foam, which is made of MDI. Photo by Al Greenwood