The Urethane Blog

Wanhua Completes MDI Expansion in Yantai

The Technical Transformation Of MDI Device Expansion Is Completed, And Yantai Wanhua Is Firmly Established As A Global Leader!

[Feb 26, 2021]

On the evening of February 24, 2021, Wanhua Chemical issued an announcement stating that Wanhua Chemical’s Yantai Industrial Park had an original production capacity of 600,000 tons per year for the MDI plant. Technical transformation and expansion of ton/year. The project obtained the project record certificate in June 2019, and the cumulative investment of 284 million yuan by February 2021. The successful technological transformation of this project will further enhance the company’s ability to serve customers.

Wanhua MDI’s global production capacity reached 2.6 million tons

Global market share is 28% 

Wanhua’s Yantai MDI plant for this technological transformation and expansion belongs to the isocyanate integrated capacity expansion technological transformation project announced in the 2018 EIA and is the latest generation of technology. Compared with competitors, the capacity of a single device is generally only about 400,000 tons per year. Wanhua’s expanded device is the first device in the world to successfully achieve a single device capacity of 1.1 million tons per year.

The total investment of the project is 3.562 billion yuan, and the construction content includes:

MDI device (600,000 tons/year expansion to 1.1 million tons/year)

HDI and its adduct equipment (HDI 30,000 tons/year, HDI adduct 20,000 tons/year)

ADI equipment (HMDA and HMDI expanded from 10,000 tons/year to 20,000 tons/year

IPDI expanded from 15,000 tons/year to 30,000 tons/year),

Aniline plant (nitric acid plant 360,000 tons/year; nitrobenzene plant 48+240,000 tons/year; aniline plant 36+180,000 tons/year)

Hydrogen Chloride Plant (240 thousand tons/year)

HCL gas hydrochloric acid analysis device (226,000 tons/year) and supporting public works and auxiliary facilities

After the company’s Yantai MDI plant’s 500,000-ton/year technological transformation project is put into operation, its global production capacity will reach 2.6 million tons, with a market share of 28%, further consolidating its leading position in the polyurethane industry. 

What is the impact of capacity expansion on MDI prices?

We expect that this expansion will be at the right time and will have little impact on MDI prices. Assuming that after the expansion of Wanhua’s capacity, the output elasticity is 200,000 to 400,000 tons/year, that is, the average monthly new output in the market is 16.67 to 33,300 tons. However, overseas production capacity is 1.06 million tons/year due to force majeure, with an average monthly gap of at least 35,000 tons. Even if the new capacity is fully opened, Wanhua cannot meet the supply gap. Huaan Securities predicts that the cold wave will affect the supply of MDI in the United States for 1-3 months. The force majeure will bring about 66,000 tons of new export demand. The total new demand in the next 10 months is about 199,000 tons, corresponding to the operating rate In the range of Wanhua Chemical’s theoretical operating rate, it has little effect on prices.