Review of Major Events in Polymeric MDI in 2015

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1: The BASF facility in Chongqing, China, for the production of 400,000 tons per year of MDI (diphenylmethane diisocyanate) covers an area of over 50 hectares; it includes plants for the production of 400,000 tons per year of ***, 300,000 tons per year of aniline, 400,000 tons per year of crude MDI, and 400,000 tons per year of purified MDI. This project is the world’s largest integrated diphenylmethane diisocyanate facility, established through a contract signed in 2007 between Chongqing Chemical Industry Group and BASF Europe. With a total investment of 35 billion yuan, it began operations in the second quarter of this year. After going into production, annual sales are expected to reach 50 billion yuan. According to local **estimates, this project is expected to generate 200 billion yuan in output for industries such as petroleum, natural gas, and chemical manufacturing in Chongqing. It will help coordinate the development of these industries in Sichuan and Chongqing and promote the upgrading of the local chemical industry. 2: South Korea’s Kumho and Japan’s NPU will undergo maintenance in April and May, which is beneficial for the market. 3: In April, the industrial park where BASF in Shanghai is located underwent a centralized maintenance campaign, and the 210,000-ton MDI plant also went through routine maintenance for three weeks. 4: The Brazilian Trade Commission issued a statement deciding to exempt polymeric MDI imported from China from anti-dumping duties for one year, starting from May 7, 2015. 5: In May, affected by the situation in the Middle East and the continuous decline in crude oil prices, the price of polymeric MDI in the Middle East dropped significantly over three weeks. 6: On June 2, BASF announced the discontinuation of all its Lupranate? products The force majeure affecting the MDI (MMDI) products shall take effect immediately. 7: The MDI plant in Yantai Industrial Park has been put into operation. The petrochemical integration project was launched at the end of June 2015, and sales revenue of 26 billion yuan is expected to be generated in 2015. 8: Bayer MaterialScience closed its MDI plant near Rio de Janeiro in July 2015. By then, the company’s MDI output for the market will be reduced by 55,000 tons per year. In addition, the polyether polyol plant with an annual production capacity of about 15,000 tons, as well as the small paint raw material production plant, will also cease operations at that time. 9: An explosion occurred in a nitrogen tank at Huntsman’s white pigment plant in Uettingen, Germany. The company has safely and carefully halted the relevant operations, and an investigation into the incident is currently underway. 15 people received medical treatment at the scene or in hospitals, 2 were kept under observation in the hospital, and no deaths occurred. It will not have an impact on the MDI market for the time being. 10: On August 26, BASF, the world’s largest chemical company, will officially announce that its wholly-owned MDI (diphenylmethane diisocyanate) integrated production facility in Chongqing (referred to as Chongqing BASF) has commenced operations recently. 11: The MDI integrated plant at Wanhua’s Yantai industrial park will be shut down on September 1, 2015, for maintenance that is scheduled to last 29 days. Due to the impact of associated utility systems, the load on some of the plants in the PO/AE integrated plant will be reduced during this period, and corresponding optimization maintenance will be carried out. 12: As international crude oil prices fall, the prices of pure benzene, which is a key raw material for Wanhua’s MDI product, will also drop accordingly. However, fixed costs remain relatively stable, so this will have a certain negative impact on the company’s profits. 13: The Cangzhou Lingang Economic and Technological Development Zone and Jilin’s Cornell Chemical Industry Co., Ltd. officially signed an agreement, marking the establishment of a project with an annual production capacity of 800,000 tons of MDI in the Bohai New Area. 14: In October 2015, Wanhua Chemical set the listed price for its polymeric MDI at 10,000 yuan per ton, a decrease of 2,400 yuan per ton compared to the previous period; the product was supplied at a 30% discount, with strict controls in place, and no targets were set for production volume. The recommended price remained at least 9,600 yuan per ton. This price represents the lowest level ever seen since the introduction of MDI. 15: In its most recent annual report, the Mitsui Chemicals Group stated that it has decided to advance the closure dates for all of its plants in Kashima, Japan, as well as the MDI plant in Omuta, to May 2016, from the originally planned date of December 31, 2016. All factories at Kashima will be shut down by then, including the toluene diisocyanate plant with a production capacity of 117,000 tons per year, the maleic anhydride plant with a capacity of 32,000 tons per year, the fumaric acid plant with a capacity of 15,000 tons per year, the specialty isocyanate plant with a capacity of 1,500 tons per year, and the hexamethylenediisocyanate plant with a capacity of 900 tons per year. Among them, the 1,500 tons/year specialized isocyanate plant will be transferred from Kashima to Omuta after it is shut down. Meanwhile, Mitsui will also close its MDI plant in Omuta with an annual capacity of 60,000 tons. 16: On October 15, one unit of Wanhua MDI in Ningbo was shut down for maintenance, while the unit in Yantai came online. 17: Nippon Polyurethane (Ryuan)’s MDI production plant with an annual capacity of 70,000 tons began a 75-day shutdown for maintenance on October 10. At 18:11, December saw a dramatic rebound in the prices of polymeric MDI; manufacturers such as Wanhua, Cosmochem, and BASF raised the listed prices of their products significantly, driving up overall product prices. Source: Sina Finance