Isocyanates Markets Begin to Stabilize in Some Regions as Supply is Restored

The North American MDI market is still tight as 2021 gets underway. Crude and pure MDI are heard to be short, even though operators have started to increase production following months of disruption.   Shortages of raw materials continue to be the cause of supply cuts. In operations, BASF announced that the first phase of its new MDI plant in Geismar, Louisiana, has been completed. 

The first phase includes the construction of a new synthesis unit and the second phase, expansion of its upstream units, is now under construction and expected to be completed by the second half of 2021. The new plant is expected to produce 600 ktpa MDI and go online around mid-2025.

European MDI markets ended the year in a better supply position than was seen between September and November. Major supply disruptions meant prices increased significantly during those months, but the market stabilized somewhat in December and prices are seeing smaller upticks. Demand remained healthy in December, even though the market usually slows down for the festive period.   Offtake volumes usually tail off in the second half of December as many downstream factories shut down around this time. However, strong demand saw plants continue to run at high levels. Some players suggested the increase in demand also came from the US, as supply has been tight there since September.