The Urethane Blog

June 25, 2019

Polyol Update

US H2 polyol demand likely to grow slower than expected

Source: ICIS News

2019/06/18

HOUSTON (ICIS)–Demand for US polyols slowed during the first half of 2019 when compared with the prior year and the second half of the year is likely to see a similar pattern of consumption, rising at a slower rate relative to 2018.

Photo by Design Pics Inc/REX/ShutterstockA deceleration in global economic growth has also weighed on polyol demand and this factor is likely to remain in place over the short term as several economists have voiced concerns over a possible global recession within the coming quarters.

The automotive industry has been slowing globally as trade tensions create uncertainty and amid stricter regulations in several countries.

Furniture and bedding demand within North America has also been sluggish for the past several months, although the industry is hopeful that mattress sales may find some support following a recent decision by the US government to impose anti-dumping duties on shipments from China.

Demand from the construction sector is likely to pick up during the third quarter before slowing in the fourth quarter, following normal seasonality factors. The construction season in North America was slow to start the year, which contributed to inventory build ups in a number of polyurethane intermediates.

On the supply side, polyol availability is anticipated to remain sufficient as the US market is structurally long. This dynamic is unlikely to change over the short term.

Pricing dynamics will continue to remain closely tied to movements in key feedstock markets.

Polyether polyols generally track the direction of upstream propylene feedstock costs, which may face some downward pressure in the coming months as propylene inventories remain sufficient while derivative demand has been sluggish.

24CC2623B9008121723EC56EAEE84EF6.jpg

Polyester polyols tend to follow the direction of diethylene glycol (DEG) feedstock costs.  DEG supplies may lengthen in the coming months on new capacity in the US.

BDA83CF06351F458A31EB868007D4DD4.jpg

Polyols are often reacted with isocyanates to make polyurethanes (PU), which are used to make mattresses, foam insulation for appliances (refrigerators and freezers), home and automotive seats, elastomeric shoe soles, fibres and adhesives.

Major US producers of polyols include Covestro, Dow, BASF, Huntsman and Monument Chemical.

Image above shows polyurethane foam. Polyurethanes are made with polyols. Photo by Design Pics Inc/REX/Shutterstock 

Focus article by Zachary Moore

https://www.icis.com/explore/resources/news/2019/06/18/10378180/us-h2-polyol-demand-likely-to-grow-slower-than-expected?utm_source=dlvr.it&utm_medium=twitter

June 24, 2019

Covestro Celebrates 3MM Tons of TDI

Via Google Translate . . .

Monday – June 24, 2019
Covestro writes a Dormagener success story:
Three million tons of TDI!

Soft foam component for mattresses and car seats / 55 years of experience in the Dormagen TDI production / TDI system went into operation in 2014

https://presse.covestro.de/news.nsf/9e98be153cdcc54ac1257ac2006c2bf3/738a3094bd8f4bcbc1258423002e1ed6/$FILE/2019-094.jpg
Three million TDI: Covestro site manager in Dormagen Rob Eek congratulated TDI operations manager Andreas Rausch and the entire operations team.

It is a real tongue twister: tolylene diisocyanate, short TDI. Behind the complex name is a liquid raw material from which flexible polyurethane foams are produced. Covestro has been producing TDI in Dormagen for 55 years and has now produced the three millionth tonne.

The daily production of the TDI plant in Chempark Dormagen alone is sufficient today to produce 200,000 mattresses. Given such amounts, even the princess would sleep comfortably on the pea. But the high-tech material not only ensures sweet dreams. Much of the production goes into the automotive industry to make car seats. The special isocyanate also sets trends in fashion: as a shoulder pad or in bra cups, it cuts a fine figure.

“The production of TDI is one of our focal points here in Dormagen. At the same time, the TDI plant is a milestone in terms of efficiency and environmental compatibility. Thanks to state-of-the-art plant technology, we are able to produce the important raw material for flexible foams in a resource-saving and environmentally friendly manner, “says production manager in Dormagen. Rob Eek’s TDI production in Dormagen.

55-year track record in TDI production
The Dormagener success story began in 1964 in the western part of the site. TDI production started at a rate of 24,000 tons per year and grew steadily to 75,000 tons capacity. In 2014, today’s world-scale plant with 300,000 tonnes went into operation in Ostwerk and took over production. It fits perfectly into the fabric of the site: the starting product toluenediamine (TDA) comes from the neighboring plant. Raw materials such as toluene, hydrogen and nitric acid are also produced in Dormagen.

“The new plant is one of three Covestro production sites for TDI worldwide,” explains Dr. Andreas Rausch, head of the TDI plant in Dormagen. “Sister plants are located in southern China’s Caojing and Baytown, USA. The Dormagener operation is the youngest and has the most modern technology “, continues Rausch. The technical know-how of the employees from the old plant ensured continuity in production. In its predecessor business, among other things, GPP technology (gas phase phosgenation) was developed in 2004, which consumes 80 percent less solvent and up to 60 percent less energy than conventional liquid phosgenation to date.

Another special feature from the history: The shipping company, which takes care of the storage, filling and shipping of the TDI, has remained old – in the Westwerk. The TDI enters the storage tank of the shipping company via a pipeline, is then filled up and transported to the customer. They make flexible foams for a wide variety of applications.

How is foam made of TDI?
Foam is formed by the addition of polyols, which combine in a so-called polyaddition reaction with the TDI. The mixing ratio varies depending on the type of polyol and the nature of the foam. For a mattress, for example, there are usually two parts of polyol on one part of TDI. The addition of water produces gaseous carbon dioxide in the reaction, which can no longer escape from the viscous mass and forms bubbles. The volume increases many times over.

The applications are diverse and constantly evolving. The basic idea is more than 70 years old. Otto Bayer, the inventor of polyurethane chemistry, was already looking for a raw material for fully synthetic fibers in the late 1930s – similar to nylon. A failed attempt in 1941 produced a mass that was completely blistered. The birth of the foam!

 

Andreas Rausch, head of the TDI plant in Dormagen

https://presse.covestro.de/news.nsf/id/Drei-Millionen-Tonnen-TDI

June 24, 2019

Covestro Celebrates 3MM Tons of TDI

Via Google Translate . . .

Monday – June 24, 2019
Covestro writes a Dormagener success story:
Three million tons of TDI!

Soft foam component for mattresses and car seats / 55 years of experience in the Dormagen TDI production / TDI system went into operation in 2014

https://presse.covestro.de/news.nsf/9e98be153cdcc54ac1257ac2006c2bf3/738a3094bd8f4bcbc1258423002e1ed6/$FILE/2019-094.jpg
Three million TDI: Covestro site manager in Dormagen Rob Eek congratulated TDI operations manager Andreas Rausch and the entire operations team.

It is a real tongue twister: tolylene diisocyanate, short TDI. Behind the complex name is a liquid raw material from which flexible polyurethane foams are produced. Covestro has been producing TDI in Dormagen for 55 years and has now produced the three millionth tonne.

The daily production of the TDI plant in Chempark Dormagen alone is sufficient today to produce 200,000 mattresses. Given such amounts, even the princess would sleep comfortably on the pea. But the high-tech material not only ensures sweet dreams. Much of the production goes into the automotive industry to make car seats. The special isocyanate also sets trends in fashion: as a shoulder pad or in bra cups, it cuts a fine figure.

“The production of TDI is one of our focal points here in Dormagen. At the same time, the TDI plant is a milestone in terms of efficiency and environmental compatibility. Thanks to state-of-the-art plant technology, we are able to produce the important raw material for flexible foams in a resource-saving and environmentally friendly manner, “says production manager in Dormagen. Rob Eek’s TDI production in Dormagen.

55-year track record in TDI production
The Dormagener success story began in 1964 in the western part of the site. TDI production started at a rate of 24,000 tons per year and grew steadily to 75,000 tons capacity. In 2014, today’s world-scale plant with 300,000 tonnes went into operation in Ostwerk and took over production. It fits perfectly into the fabric of the site: the starting product toluenediamine (TDA) comes from the neighboring plant. Raw materials such as toluene, hydrogen and nitric acid are also produced in Dormagen.

“The new plant is one of three Covestro production sites for TDI worldwide,” explains Dr. Andreas Rausch, head of the TDI plant in Dormagen. “Sister plants are located in southern China’s Caojing and Baytown, USA. The Dormagener operation is the youngest and has the most modern technology “, continues Rausch. The technical know-how of the employees from the old plant ensured continuity in production. In its predecessor business, among other things, GPP technology (gas phase phosgenation) was developed in 2004, which consumes 80 percent less solvent and up to 60 percent less energy than conventional liquid phosgenation to date.

Another special feature from the history: The shipping company, which takes care of the storage, filling and shipping of the TDI, has remained old – in the Westwerk. The TDI enters the storage tank of the shipping company via a pipeline, is then filled up and transported to the customer. They make flexible foams for a wide variety of applications.

How is foam made of TDI?
Foam is formed by the addition of polyols, which combine in a so-called polyaddition reaction with the TDI. The mixing ratio varies depending on the type of polyol and the nature of the foam. For a mattress, for example, there are usually two parts of polyol on one part of TDI. The addition of water produces gaseous carbon dioxide in the reaction, which can no longer escape from the viscous mass and forms bubbles. The volume increases many times over.

The applications are diverse and constantly evolving. The basic idea is more than 70 years old. Otto Bayer, the inventor of polyurethane chemistry, was already looking for a raw material for fully synthetic fibers in the late 1930s – similar to nylon. A failed attempt in 1941 produced a mass that was completely blistered. The birth of the foam!

 

Andreas Rausch, head of the TDI plant in Dormagen

https://presse.covestro.de/news.nsf/id/Drei-Millionen-Tonnen-TDI

June 24, 2019

Benzene Rising in U.S.

Europe benzene, styrene supply to stay long on increased Asian capacities

Source: ICIS News

2019/06/19

LONDON (ICIS)–Benzene and styrene availability in Europe for the remainder of 2019 will most likely be long, and that length is set to prevail into 2020 on the back of increased Asian capacity.

Programme to improve energy efficiency of homes, Llanelli, Wales, Britain - 03 Feb 2015

Benzene and styrene are each coming out of the peak turnaround season, set to conclude by the end of June and which went according to plan, leaving little impact in the markets.

There was a massive inventory built-up in preparation for the outages, which caused styrene prices to rise from November to April.

Inventories are now being drawn down.

Benzene prices have been following the US’ global pricing lead and look set to continue that trend for now.

Europe is trading at just below a workable arbitrage to the US. While Europe was the highest-priced region for a long while, it is now second, with Asia third.


–
Trade is expected to continue being thin in a long market for both products, with business increasingly being done on a contractual basis to limit risks.

https://www.icis.com/explore/resources/news/2019/06/19/10380072/europe-benzene-styrene-supply-to-stay-long-on-increased-asian-capacities

Houston — Surging benzene costs have prompted US styrene producers to begin cutting run rates, multiple sources told S&P Global Platts this week.

A recent surge in pricing has left some derivative producers questioning the prudence of producing incremental tons, and at least two styrene producers noted that rate cuts have already begun.

“I’ve eliminated open [or] spot positions,” one producer said. “I have no incentive to produce spot material.”

Prompt- and forward-month spot benzene prices have risen sharply over the past week amid ongoing supply tightness and multiple short positions, sources said.

June benzene was heard traded as high as 315 cents/gal on Tuesday, up 69 cents over the course of a week. July was heard traded multiple times at 275 cents/gal, up 38 cents week on week. Sources pointed to ship delays and diminished domestic production from poor toluene conversion economics as drivers of the tight supply.

The impact of rising benzene costs was evident in the spot styrene-benzene spread. Spot styrene prices have been relatively stable recently and pricing has been talked at $910-$920/mt or at the netback to European styrene prices. The higher benzene values, however, have pushed the spread into negative territory, last estimated at minus $23/mt, assuming styrene at $920/mt and benzene at 315 cents/gal ($943/mt).

Another noteworthy metric is the impact of higher pricing on styrene producers with tolling agreements. With the June benzene contract at 234 cents/gal and considering the adder to produce styrene, producers have more financial incentive to, if possible, sell the benzene and buy styrene, while keeping a profit of over $100/mt.

Sources added that rate cuts were not likely to be confined to styrene makers but could include other derivatives such as cumene. No confirmed cumene rate cuts were heard at time of publication, however.

Looking ahead, participants anticipate little change headed into July and expect that the July benzene contract will rise significantly, though the exact increase will not be clear until the end of June.

Still, supply is expected to remain tight into the first half of July amid expectations of increased imports. Month to date, benzene imports in June have totaled just over 79,000 mt, and sources anticipate that number could be as high as 130,000 mt by the end of June. Similar volumes are expected in July and August with multiple ships carrying 20,000-30,000 mt of benzene loading out of Asia and amid talk of exports out of Europe as well.

Sources noted that the imports, coupled with rate cuts and the potential for benzene consumers to resell volumes back into the market, could ultimately result in a sharp correction in the market.

“The benzene contract will be high in July and that will push away our polymer customers, but I think they will return in August when the contract falls,” a styrene producer said.

— Kevin Allen, kevin.allen@spglobal.com

— Edited by Jennifer Pedrick, newsdesk@spglobal.com

https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/061919-us-styrene-producers-begin-rate-cuts-amid-surging-benzene-prices

 

June 24, 2019

Benzene Rising in U.S.

Europe benzene, styrene supply to stay long on increased Asian capacities

Source: ICIS News

2019/06/19

LONDON (ICIS)–Benzene and styrene availability in Europe for the remainder of 2019 will most likely be long, and that length is set to prevail into 2020 on the back of increased Asian capacity.

Programme to improve energy efficiency of homes, Llanelli, Wales, Britain - 03 Feb 2015

Benzene and styrene are each coming out of the peak turnaround season, set to conclude by the end of June and which went according to plan, leaving little impact in the markets.

There was a massive inventory built-up in preparation for the outages, which caused styrene prices to rise from November to April.

Inventories are now being drawn down.

Benzene prices have been following the US’ global pricing lead and look set to continue that trend for now.

Europe is trading at just below a workable arbitrage to the US. While Europe was the highest-priced region for a long while, it is now second, with Asia third.


–
Trade is expected to continue being thin in a long market for both products, with business increasingly being done on a contractual basis to limit risks.

https://www.icis.com/explore/resources/news/2019/06/19/10380072/europe-benzene-styrene-supply-to-stay-long-on-increased-asian-capacities

Houston — Surging benzene costs have prompted US styrene producers to begin cutting run rates, multiple sources told S&P Global Platts this week.

A recent surge in pricing has left some derivative producers questioning the prudence of producing incremental tons, and at least two styrene producers noted that rate cuts have already begun.

“I’ve eliminated open [or] spot positions,” one producer said. “I have no incentive to produce spot material.”

Prompt- and forward-month spot benzene prices have risen sharply over the past week amid ongoing supply tightness and multiple short positions, sources said.

June benzene was heard traded as high as 315 cents/gal on Tuesday, up 69 cents over the course of a week. July was heard traded multiple times at 275 cents/gal, up 38 cents week on week. Sources pointed to ship delays and diminished domestic production from poor toluene conversion economics as drivers of the tight supply.

The impact of rising benzene costs was evident in the spot styrene-benzene spread. Spot styrene prices have been relatively stable recently and pricing has been talked at $910-$920/mt or at the netback to European styrene prices. The higher benzene values, however, have pushed the spread into negative territory, last estimated at minus $23/mt, assuming styrene at $920/mt and benzene at 315 cents/gal ($943/mt).

Another noteworthy metric is the impact of higher pricing on styrene producers with tolling agreements. With the June benzene contract at 234 cents/gal and considering the adder to produce styrene, producers have more financial incentive to, if possible, sell the benzene and buy styrene, while keeping a profit of over $100/mt.

Sources added that rate cuts were not likely to be confined to styrene makers but could include other derivatives such as cumene. No confirmed cumene rate cuts were heard at time of publication, however.

Looking ahead, participants anticipate little change headed into July and expect that the July benzene contract will rise significantly, though the exact increase will not be clear until the end of June.

Still, supply is expected to remain tight into the first half of July amid expectations of increased imports. Month to date, benzene imports in June have totaled just over 79,000 mt, and sources anticipate that number could be as high as 130,000 mt by the end of June. Similar volumes are expected in July and August with multiple ships carrying 20,000-30,000 mt of benzene loading out of Asia and amid talk of exports out of Europe as well.

Sources noted that the imports, coupled with rate cuts and the potential for benzene consumers to resell volumes back into the market, could ultimately result in a sharp correction in the market.

“The benzene contract will be high in July and that will push away our polymer customers, but I think they will return in August when the contract falls,” a styrene producer said.

— Kevin Allen, kevin.allen@spglobal.com

— Edited by Jennifer Pedrick, newsdesk@spglobal.com

https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/061919-us-styrene-producers-begin-rate-cuts-amid-surging-benzene-prices