With the re-launch of BASF's TDI plant in Ludwigshafen, Germany, the market is shifting from a persistent supply shortage to an overcapacity. The global TDI market price will fall and the operating rate of related equipment will fall.
BASF's 300,000-tonne TDI plant was put into production at the end of 2015. In November 2016, the reactor was damaged due to damage to the reactor. The plant's TDI plant was then switched to a small reactor for batch production, and the output was greatly reduced. The plant and the Saudi Arabian company's annual production capacity of 200,000 tons have been very popular in the market. People originally expected that the two sets of equipment could meet the market supply when other TDI devices were shut down in 2014-2016.
However, the TDI installations of BASF and Sardar failed to put into production as scheduled, and a series of other shutdowns and force majeure events have intensified the global supply of TDI, which has caused the global TDI price to soar and the price gap with raw material toluene has widened. In June of this year, with the re-launch of BASF's damaged parts of the TDI device in Germany, the market price went down. The plant accounts for about 10% of the global TDI capacity of about 3 million tons per year.
Rob Peacock, a consultant at ICIS, pointed out: 'If BASF's TDI installation load in Ludwigshafen, Germany increases to 80% or more, and then enters the market for 2 to 3 months, the market prices in Europe and the Middle East will face downward pressure. If the production of the Sadar plant is also greatly increased, it will definitely have a greater impact on the Middle East market.
The TDI market is highly concentrated, with 5 major producers occupying more than 70% of the global market share. BASF and Covestro are the world's two largest producers. BASF CEO Bo Biao recently said: 'The global TDI market has been in the past year and a half. The situation is frequent and it is now back to normal. We have a lot of supply around the world, of course we have to adjust our trading volume. 'The company's chief financial officer Hans-Ulrich Engel added: 'The trade in isocyanate is becoming normalized, its The up cycle is longer than expected. The profit margin of Asian TDI devices may normalize next month.'
Covestro, which has a global market share of 30%, benefited from the extreme supply shortage in the TDI market. In 2017, the fast-track EBITDA of polyurethane boards increased by 151% to more than 2.2 billion euros. With the full production of the BASF TDI plant, the market supply will become normal and difficult to reproduce.
On July 26, Covestro announced the results of the second quarter of this year. Although there are signs that the high price of some polyurethane products began to return to normal, thanks to the high price in the first half of the year, the company will still achieve 2018 results. Expected to rise above 2017. Covestro said there are indications that market prices are normalizing in certain product sectors, especially the soft plastic precursor TDI.