THE HAGUE, NETHERLANDS — The polyurethanes industry is in for "a period of significant cost increase" and further consolidation, Charles Churet, Dow Polyurethanes' commercial director of polyurethanes, told a news conference at the UTECH event in The Hague. "We are implementing some very significant price moves on basic raw materials in the order of 15 percent vs. where they were," said Churet, who linked the future materials price outlook to decisions on oil production and pricing being made by the Organization of the Petroleum Exporting Countries.
"If oil prices continue to rise and if primary feedstocks — propylene, benzene and toluene — become short, then these increases are clearly not enough [for Dow] to recover margins," Churet said.
The Dow executive went on to say that pressure on margins and investment costs will leave less room for niche or regional players in the PU market, leading to further consolidation around the four main players — BASF, Bayer, Dow and Huntsman.
Churet is the president of ISOPA, the European isocyanate manufacturers' association. He introduced Hugo Lever, director general of CEFIC, the European chemical industry council, who described the "love-hate relationship" between chemicals and society.
The conference drew more than 3,500 visitors and 125 supplier exhibitors.
Another view on supply, demand and prices came from Patrick Thomas, president of Huntsman Polyurethanes, based in Everberg, Belgium. A continuing high growth rate for methylene diphenylene diisocyanate of 11 percent means that "this part of the [chemicals] business is not really challenged by normal pressures," said Thomas.
But discussing the high capacity utilization of Huntsman's new MDI plant in Geismar, La., he added, "We are getting to the point in MDI capacity where availability constricts growth."
People will invest in the MDI sector "if prices are at the right level," Thomas continued. He added that prices of pure MDI already have gone up, polymeric MDI prices are scheduled to rise, and more increases are on the way.
