On the evening of November 23, Wanhua Chemical issued an announcement stating that in accordance with the requirements of the production process and production equipment of chemical enterprises, in order to ensure the safe and effective operation of production equipment, in accordance with the annual plan, the company’s wholly-owned subsidiary Wanhua Chemical (Ningbo) Co., Ltd. The second phase of the MDI unit (800,000 tons/year) will be shut down for maintenance on December 15, 2020, and the maintenance is expected to be about 25 days.
MDI and TDI are substitutes for each other and both are raw materials for the production of polyurethane. The MDI device has the characteristics of high barriers and high investment, and the downstream is mainly rigid foaming such as refrigerators and freezers, cold chain transportation and insulation, as well as spraying, plate and other industries.
The MDI and MDI industries are monopolistic industries. Bayer, BASF, Dow, Huntsman, Wanhua, and the five major manufacturers account for more than 90% of the world's total production capacity.
Among them, Wanhua Chemical, as the only domestic MDI manufacturer with independent intellectual property rights, is the world's largest MDI supplier. Its MDI design capacity is 2.3 million tons per year, and its annual operating capacity is 1.8 million tons. The global production capacity accounts for 22.5% and domestic production accounts for 58%, both ranking first.
As the MDI and TDI industry patterns are very concentrated, among the domestic manufacturers, Wanhua Chemical and Cangzhou Dahua are the most representative. The routine shutdown of Wanhua Chemical’s MDI Phase II unit for maintenance may cause market supply to shrink.
