Ludwigshafen, Germany – BASF will start up TDI in Ludwigshafen in the coming months, said the company’s CEO, Kurt Bock, at its annual results press conference. The plant is scheduled to increase production in March and April, but Bock declined to give a date for full capacity to be achieved.
‘We are in the midst of replacing the reactor, the spare reactor which we have put into operation in Ludgwgshafen, last year. Now, we are putting in the new one. That is happening as we speak. That should bring BASF capacity up again,’ Bock said.
‘TDI Ludwigshafen has been a challenge,’ he continued. ‘Sometimes [it has been] from a completely unexpected angle like the rector going belly-up last year, despite all the testing. I think the team has done tremendous work to overcome these challenges.’
The 300 kT/year plant’s construction was delayed by a year, and then opened in 2015.
‘Frankly, I cannot see that we have lost any market share, quite to the contrary. Or that our margins are less than our competitors in that business,’ he added. ‘We just started up an MDI plant in Shanghai [Caojing, a jv with Huntsman] that is on time, and it’s producing.’
Looking into 2018, he said, ‘I expect that there will continue to be healthy demand and utilisation rates will come down a bit. We will have to see what kind of influences that has on pricing.’
Bock added that pricing also reflects production issues at a couple of competitors. ‘The supply-demand balance is tight overall for a couple of reasons,’ he said. ‘There is good underlying demand. There are external factors… In Louisiana, for example, we had freezing temperatures. This is not supposed to happen. We had a supply issue from an external supplier, so we had to reduce capacity utilisation at some of our plants. This is unforeseeable.’
Turning to the supply of off-spec TDI to the European market in the third quarter of 2017, Bock said: ‘We are in discussions with direct and indirect customers about how to solve the problems.’ The supply caused production interruptions at a number of companies. Recticel specifically mentioned the supply problem as reducing margins in its mattress division in its annual results.
‘It is important that we demonstrated that the product was not on spec, and that the dichlorobenzene had no negative impact on properties or safety of the product,’ he added.