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BorsodChem PU sales up, but margins squeezed

By Patrick Raleigh UT On-line news editorKazincbarcika, Hungary-BorsodChem Rt. has posted significant sales advances in its two isocyanates product lines-TDI (toluene diisocyanate) and MDI (methylene diphenyl diisocyanate)- in 2003. Margins in these sectors were, however, pegged back by rising raw material costs and pricing pressure.The biggest swings were in the Hungarian group’s TDI business, where sales lifted 21.4 percent to HUF25 167 million ($122 million). However, the increase reflected higher volumes-up 21.2 percent (or 10.4kt) compared to 2002-rather than stronger pricing, according to a BorsodChem statement.Last year, BorsodChem said the average European listing price for TDI fell slightly compared to 2002, to Euro1948/tonne. TDI list prices also fell 4.5-percent between the fourth and third quarters of 2003, averaging Euro1735/tonne in the final quarter, it added.Meanwhile, prices for aniline-a key feedstock for TDI-increased “significantly” compared to 2002, the 11 Feb statement added. Against this, Borsodchem went on to describe TDI as a “good margin” business last year. BorsodChem’s MDI unit achieved an 11-percent rise in 2003 sales to HUF18 955 million, including 6.5-percent higher volumes. The unit, it said, benefited from a fourth quarter recovery in business with the construction sector, which uses MDI-based materials in rigid foam insulation products.The 2003 list price of crude MDI was Euro1414/tonne-7.1 percent higher than the previous year-while fourth quarter prices averaged Euro1424/tonne, according to BorsodChem. However, pure MDI prices “slightly eroded” averaging Euro1977/tonnes, the group added. MDI profitability was held back by benzene feedstock prices, which registered a 16-percent year-on-year rise in 2003 to Euro418/tonne, BorsodChem also noted. “

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