Chinese Aliphatic Isocyanate Overview
Major Events in China PU Industry of 2017( IPDI )
PUdaily, Shanghai – In the fourth quarter of 2017, PU industry is confronted with a fickle period mixed with harsh transformation and shuffle in the turbulent market. PUdaily would like to take the opportunity to list the most influential events in IPDI industry of 2017 for readers to review the highlights of the industry.
1. Covestro announces to raise ADI price
From March 1, 2017, or according to the contract, Covestro announces to raise the price of ADI by 15%. Meanwhile, prices of coatings and adhesives’ raw materials are also increased.
2. Evonik Integrates cross-linking agent business
From July 1, 2017, Evonik has merged its isophorone and epoxy hardener into a new cross-linking agent business line which is affiliated to the resource efficiency business under the leadership of Min Chong.
With the acquisition of Air Products’ epoxy curing agent and rich experience in isophorone, Evonik boasts a broad technical platform as well as professional crosslinking agent technology.
New cross-linking agent business line provides a wide range of products and technical support for service in coatings and adhesives, civil engineering and high-performance elastomers and composite materials.
As a pioneer in the field of isopolone chemicals, Evonik’s business covers the whole value chain, including isophorone, diamine, diisocyanate and polyisocyanate.
3. Wanhua Chemical announces the operation of program in Zhuhai
On July 29th, wanhua chemical announces that the first phase of its program in Zhuhai industrial park is officially put into production. The project includes the plant construction of 100,000-ton water-based surface material resin and 40,000-tons modified MDI. Wanhua Zhuhai industrial park is located at the national economic and technological development zone, Gaolang port, Zhuhai, Guangdong, covering an area of about 340,000 square meters.
The successful production in Wanhua Zhuhai industrial park has important strategic significance for the development of the company. On the one hand, after the installation, Wanhua is able to extend the industrial chain effectively with the MDI, acrylic acid and ester produced in Yantai industrial park project and then processed as raw material in the downstream industry. On the other hand, Wanhua improves its strategic layout of south China region. After the installation is completed, the company’s products will be able to effectively cover the Pearl River Delta, southeast Asia and other regions so that they can have a closer relationship with the customer by responding their demands quickly. Moreover, Wanhua provides customers with a variety of new materials and polyurethane products application system solutions, creating a premium in products and services.
4. Evonik raises up the price of Vestanat and Vestagon products
Around the middle of August, Evonik increases prices of aliphatic diisocyanate and derivatives of STANAT ® and VESTAGON ® brand globally by 10% and new quotations are effective immediately. The price increase covers all current contracts.
After years of stabilization, it is inevitable to raise up prices of Vestanatv® and Vestagon® due to the increasing cost in personnel, maintenance, regulatory affairs and logistics.
The price adjustment is made to ensure that Evonik crosslinking agent business line can continue to provide high quality products and services to its clients, with emphasis on supply reliability as well as products portfolio based on isophorone.
5. Covestro has declared force majeure on several product lines in North America
At the end of August, because of the production facilities in Galveston bay (Baytown) and Channelview affected by Harvey hurricane, Covestro declares the supply of the following products in North America market under force majeure: methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI), polyol, liquid alkali (50%), hydrochloric acid (36%), hexamethylene diisocyanate (HDI) and its corresponding derivatives, isophorone diisocyanate (IPDI) and its derivatives, the corresponding H12MDI (DesmodurW), Some prepolymer, polyaspartic ester. Products produced by these chemicals are widely used in automobiles, buildings, furniture and household appliances.
6. Vencorex authorizes Orkila as its distributor in South Africa
In November, Vencorex announces that it has authorized Orkila South Africa as its HDI and IPDI monomer as well as a distributor of Tolonate and Easaqua polyisocyanate in South Africa.
Bengt Arheden, marketing and sales director of companies in Europe, the Middle East and Africa, said: “We look forward to continuing to cooperate with Orkila in South Africa and replicating success in the Middle East and Africa. We believe that Orkila is an ideal partner to provide services and support to local customers in South Africa. This is a big step forward for our growth strategy after we announced the completion of industrial projects earlier this year.”
Founded in 1928, Orkila has been in South Africa for a long time, with three offices and eight warehouses. It is owned by Orkila Group, a large specialty chemicals distributor in Africa and the Middle East. The Orkila Group represents more than 100 internationally renowned chemicals manufacturers and serves thousands of customers across the region, spanning large multinational companies and smaller local producers.
7. Fuhua and Evonik establish strategic cooperation
On November 9, 2017, Sichuan Fuhua Agricultural co., LTD signs a strategic cooperation agreement with Evonik Industries in Leshan city. Mr. Zhang Hua, chairman of Fuhua Group, and Dr. Kirsch, President of the north Asia region, sign the documents. City leaders such as Mayor Zhang Tong witnessed the signing of the agreement, and Secretary Peng Lin meets with Evonik representatives.
Evonik is the world’s leading specialty chemicals company, headquartered in Germany. It has more than 36,000 employees in more than 100 countries worldwide. In 2016, it generated about 12.7 billion euros in sales and 21.65 billion euros operating profit (adjusted earnings before interest, depreciation and amortization). The signing of the strategic cooperation marks a new stage between the two enterprises, and also marks another multinational enterprise entering Leshan.
8. Covestro is about to adjust its leadership
Starting from February 1, 2018, Jerry MacCleary, president and managing director of Covestro responsible for polyurethane operations in North America, will take over as CEO and chairman of the board.
Christine Bryant, head of coating, adhesive and specialty chemicals, will take over from MacCleary as head of the polyurethane business.
Dr Erik Haakan Jonsson, chief operating officer, will take over as president and managing director of MacCleary’s job at Covestro.
In 2017, instead of being stable, the domestic IPDI market sees a turbulent situation shown by the frequent price fluctuations. The overall market goes upward after downward. In the first half of the year, with growing supply of Wanhua’s IPDI, the market became more intense and fierce in competition. IPDI price starts at 71,300 yuan/ton at the start of the year and ends at 62,700 yuan/ton in the middle of the year, down by 8600 yuan/ton or 12.1%. In the second half of 2017, when people are not optimistic about the weak season of IPDI in July and August, the market wind turns to go up, which startles them. For more details, please review the China IPDI market report for 2017 by Suntower Consulting!
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