BASF plans to restart TDI plant in Ludwigshafen, Germany

On October 13th, according to sources, BASF plans to restart its 300,000-ton/year toluene diisocyanate (TDI) plant in Ludwigshafen, Germany at the end of October. BASF said at the time that the device declared force majeure on August 31 due to production problems.

Since then, BASF has been trying to restart the plant, but the efforts were not successful. A market source said: “They will make another restart attempt within two to three days.” The source said that the company plans to carry out three months of maintenance at the TDI plant this year, but postponed it to March 2021. The reason is that the impact of COVID-19 is the main reason. A BASF spokesperson told OPIS: "The force majeure at our TDI plant in Ludwigshafen still exists."

James Elliott, chief analyst/polyurethane raw material of IHS Markit, said that the force majeure of Ludwigshafen has increased the tension in the global TDI market. This was not only driven by supply-side issues, but demand was particularly strong in the third quarter. Elliott said that an early sign of the fourth quarter is that demand continues to increase.

After investing more than 1 billion euros (US$1.17 billion) to build the TDI plant in Ludwigshafen, BASF began operations in November 2015. Elliott said that since then, it has not been able to consistently run at the best speed and has encountered various production and technical issues that have caused delays and closures. The company stopped TDI production at its 80,000-ton/year Schwarzheide plant in southern Germany in April this year.

Due to the decline in consumer spending on flexible polyurethane foam products, the COVID-19 pandemic and related blockades led to a sharp drop in TDI demand in the second quarter, and total European demand plummeted by 80% in April. But with the improvement of the new coronavirus, the TDI market has slowly recovered.

It is reported that the BASF plant accounts for about 10% of the global annual production capacity of approximately 3 million tons of TDI. The soaring price of TDI is caused by a large number of parking and force majeure, especially affecting the Middle East.

TDI is mainly used to produce polyurethane (PU) soft foam for interior decoration, mattresses and car seats.

Major US TDI producers include BASF and Covestro.

Since July, the export volume of the TDI market has increased. However, behind the TDI export, there are indeed positive supports such as the recovery of US orders. The foreign trade orders for sponges in Western Europe, Southeast Asia and China have increased to varying degrees. In this case, the supply side The unstable start-up of the European BASF and Hungarian TDI installations and the tight supply of goods made TDI increase step by step.

According to market information, Wanhua Chemical’s September TDI listing price was raised by RMB 2,000/ton to RMB 19,000/ton. The supply is in short supply, and direct sales channels provide 30% off. The month-on-month increase is 5,000 CNY/ton, the August settlement price is 13,000 CNY/ton, and the month-on-month increase is 2,500 CNY/ton.

It can be seen that short-term TDI can still rely on the increase in export orders, and the price may continue to move upward.

According to industry insiders, the current TDI terminal markets such as automobiles and real estate have recovered, and the demand for furniture and bedding is gradually approaching the pre-epidemic level. The demand side has begun to cover positions, domestic and foreign trade sponge products orders have resumed, and manufacturers have a good attitude.