By Joyce Grigorey, Tecnon Orbichem
The tightness in the global isocyanates markets that was seen in the first quarter of 2017 has continued into the second quarter, although there has been some degree of easing, particularly in the Chinese market.
In China, supply has improved substantially with the restart of BASF’s 400 kT/year MDI plant in Chongqing in early April, although the unit is reportedly running at reduced rates. The unit had previously been offline due to problems with syngas supply. As well, Wanhua Ningbo finally took maintenance at its 800 kT/year unit in late May after postponing the shutdown by three months in response to the tight market conditions. Supply in the Chinese market will improve further in June with the completion of other turnarounds. However, whilst supply is now more than ample, the high prices have stifled demand. Some downstream producers have reduced operating rates, chosen to run down inventories instead and/or limit purchases. As a result of increased supply and weaker demand, MDI prices in China have been falling in June and are expected to continue doing so into July.
Western markets, in particular Europe, continue to be tight. Buyers in the US report they are able to secure full volumes, but the Europeans are still short of material. Production problems continued to plague the European market in May and into June. Huntsman ran into technical issues when restarting its 400 kT/year MDI unit in Rozenburg,…