October 29, 2024 – Global MDI Market Experiences Turbulence with Supply Shortages and Price Surges
The global MDI (Methylenediphenyl Diisocyanate) market has witnessed significant turbulence this year, as several international giants have faced force majeure or unexpected shutdowns of their MDI facilities. These incidents have resulted in a global MDI capacity gap, leading to a surge in market prices. Notably, companies such as BASF, Covestro, Dow in the United States, Kumho Mitsui Chemicals in South Korea, and Huntsman in the Netherlands have all experienced production disruptions at different times, further exacerbating the tight market supply situation.
Entering the fourth quarter, multiple MDI facilities, accounting for 23.8% of global capacity, are scheduled for maintenance shutdowns. This includes facilities from Ningbo Wanhua Phase 2, Shanghai Huntsman, Shanghai Covestro, Chongqing BASF, Korean BASF, and Tosoh in Japan. These planned maintenance shutdowns will keep the global MDI supply tight.
In the Chinese market, according to the latest data released by the China Customs, China’s polymeric MDI exports reached 94,900 tonnes in September 2024, marking a year-on-year increase of 27.3% and a month-on-month increase of 8.7%. From January to September, China’s cumulative polymeric MDI exports amounted to 904,500 tonnes, up 5.7% year-on-year. The annual export volume is expected to reach a new high of 1.2 million tonnes. The United States remains the largest export destination for China’s MDI products, with cumulative exports of 213,100 tonnes in the first nine months, accounting for 24% of the total and a year-on-year increase of 6.9%. The Netherlands and Russia follow closely behind.
In the Asian region, companies are accelerating their expansion plans. On October 23, Mitsui Chemicals announced on its official website that the expansion of its MDI production facility by its joint venture, Kumho Mitsui Chemicals, in South Korea, commenced commercial operations at the end of September. Following this expansion, Kumho Mitsui Chemicals’ MDI capacity has reached 610,000 tonnes per year, surpassing Tosoh’s 480,000 tonnes per year to rank sixth globally.
From a global MDI capacity distribution perspective, Wanhua Chemical still tops the list with an MDI capacity of 3.5 million tonnes, accounting for 32% of global capacity. It is followed by BASF, Covestro, Huntsman, and Dow. Notably, apart from Wanhua Chemical, there have been almost no new plant commissions or expansions by global MDI producers in recent years, with relatively limited changes in other factories’ capacities. The new plant commissions are mainly concentrated in the Asia-Pacific region, particularly in China.
Looking ahead to 2024, there are three modification/expansion plans with a new capacity of 700,000 tonnes per year, namely the 400,000-tonne MDI technological transformation project by Fujian Wanhua, the 100,000-tonne expansion plan by Chongqing BASF, and the 200,000-tonne expansion plan by Kumho Mitsui. Currently, Fujian Wanhua and Kumho Mitsui have completed their technological transformation plans, leaving only Chongqing BASF’s 100,000-tonne expansion unfinished. The expansion is expected to be completed by the end of the year, bringing China’s domestic MDI industry capacity to 4.88 million tonnes per year and the global total capacity to 11.02 million tonnes.