Development and Prospects of Isocyanates in China

By Zhang Li, China National Petroleum & Chemical Planning Institute

Isocyanates are important raw materials for the production of polyurethanes. They can be classified by structure into aliphatic isocyanates and aromatic isocyanates. Major varieties of aromatic isocyanates include toluene diisocyanate (TDI) and methylene diphenyl diisocyanate (MDI). As the production of TDI and MDI uses low-priced toluene as raw material, they have developed rapidly and already hold a dominant position. Other aromatic isocyanates include 1,5-naphthalene diisocyanate (NDI), m-xylylene diisocyanate (XDI) and tetramethyl xylylene diisocyanate (TMXDI). They also have sound market prospects in some special sectors. Aliphatic diisocyanates (ADI) mainly include hexamethylene diisocyanate (HDI), isophorone diisocyanate (IPDI) and methylenebis (cyclohexyl isocyanate) (HMDI). The output of HDI accounts for around two-thirds of the total ADI output in the world and the combined output of HDI, IPDI and HMDI accounts for over 85%.

1. Supply/demand status

By the end of 2014 there were 9 isocyanate producers (11 plants) in China and the total capacity was 3 485 kt/a. Domestic producers of aromatic isocyanates (such as MDI and TDI) have already achieved large-scale production and can basically meet the market demand. The commercialization of aliphatic isocyanates (such as HDI, HMDI and IPDI) using domestic technologies is however still at the initial stage, and only some commercial HDI units have been constructed. See Table 1 for details.

2. Product classification

2.1 MDI
The total MDI capacity in China was 1.99 million t/a in 2013, output was 1.60 million tons and consumption was 1.75 million tons. New MDI capacity going on stream in 2014 included 600 kt/a of Wanhua Chemical Group Co., Ltd. and 150 kt/a of Bayer (Shanghai) Polyurethane Co., Ltd. By the end of 2014, total MDI capacity had reached 2.54 million t/a, an increase of 28% over the end of the previous year. Table 2 shows the MDI producers in China.
As for today’s capacity development projects, the 400 kt/a MDI unit of Chongqing BASF Polyurethane Co., Ltd. is planned to be completed at the end of 2015 and the 240 kt/a MDI unit of Shanghai Lianheng Isocyanates Co., Ltd. is planned to be completed in 2017. It is expected that China’s total MDI capacity will reach 3.18 million t/a at the end of 2017.
The consumption of MDI in China in 2013 was 1.75 million tons. The average annual growth of consumption during 2000-2013 was 18.9%. The consumption of polymeric MDI accounted for two-thirds of the total, and the consumption of pure MDI accounted for one-third. Pure MDI is used mainly to produce non-foam products for slurries, shoe sole fluids and polyurethane fibers. Polymeric MDI is used mainly to produce polyurethane foams for rigid foam thermal insulating materials, coatings, adhesives, micro-porous self-skinning foams, automobile bumpers, automobile upholstery and synthetic timbers.
The demand for MDI in the household electric appliance sector, which once consumed half of China’s MDI supply, can hardly increase further anytime soon, after two years of drastic growth. With the progress of urbanization, the sustained development of the real estate sector will boost the demand for rigid foam polyurethane plates and become a main driver of the growth of demand for MDI. The average annual growth of MDI demand is expected to be around 7% during 2014-2020.
Since 2007, the shortfall of domestic MDI output in China has been reduced constantly. Output is going up, the import volume is declining and the export volume is increasing. Self-sufficiency reached over 90% in 2014. Capacity kept expanding, but the growth of sales volume slowed down. The trend of increasing oversupply will become more and more evident.

Table 1    Major isocyanate producers in China, 2014  (kt/a)

Producer    MDI    TDI    HDI
Wanhua Group (Yantai, Ningbo)    1 800        15
Bayer (Shanghai) Polyurethane Co., Ltd.    500    250    30
Shanghai Lianheng Isocyanates Co., Ltd.    240        
Shanghai BASF Polyurethane Co., Ltd.        160    
Cangzhou Dahua Co., Ltd.        150    
CNGC Yinguang Group Co., Ltd. (Gansu, Liaoning)        150    
Yantai Juli Isocyanates Co., Ltd.        80    
Fujian Southeast Electrochemical Co., Ltd.        100    
Asahi Chemical Fine Chemical (Nantong) Co., Ltd.             10
Total    2 540    890    55


2.2 TDI
By the end of 2013 the China’s total TDI capacity was 790 kt/a, and output was 700 kt. A 100 kt/a TDI project of Fujian Southeast Electrochemical Co., Ltd. started production in February 2014. By the end of 2014, the total TDI capacity reached 890 kt/a. Table 3 shows the TDI producers in China in 2014.
After the acquisition of BorsodChem of Hungary, Wanhua Group has also entered the TDI sector. The 300 kt/a TDI project constructed by the company in Bajiao Industry Park is expected to be completed at the beginning of 2015. Yantai Juli Isocyalates Co., Ltd. plans to construct a 150 kt/a TDI unit in Xinjiang. New capacity also includes those from renovation and expansion made by existing producers (such as Shanghai BASF Polyurethane Co., Ltd., Bayer (Shanghai) Polyurethane Co., Ltd. and Cangzhou Dahua Co., Ltd.). Cangzhou Dahua Co., Ltd. has signed an agreement on technical renovation to a 50 kt/a TDI unit with International Chemical of Sweden. When the renovation is complete, the capacity of the unit will be 80 kt/a. China’s TDI capacity is expected to reach 1.30 million t/a in 2015.
China consumed 690 kt of TDI in 2013. The average annual growth of consumption was 13.3% during 2000-2013. TDI is consumed in China mainly in making flexible polyurethane foams, coatings, elastomers and adhesives.
Flexible polyurethane foams are used extensively in making furniture, automobiles and toys, and the use of TDI in producing these foams accounts for over 70% of TDI consumption. The use of TDI in making coatings accounts for around 20% of TDI consumption. The growth of demand for TDI in traditional sectors is expected to slow down in the next few years, and the average annual growth of TDI demand will likely be 6.7% during 2014-2020.
There was a shortage of TDI for many years in the past. Self-sufficiency reached 100% in 2012. Net export of 32 kt was achieved that year. The export volume of TDI in 2013 was 69 kt, and the net export volume was 9 kt.
Quite a few new TDI units will be launched in China in the next two or three years, risking capacity surplus.

Table 2   MDI producers in China, 2014  (kt/a)

Producer    Capacity
Yantai Wanhua Polyurethane Co., Ltd.     600
Ningbo Wanhua Polyurethane Co., Ltd.      1 200
Bayer (Shanghai) Polyurethane Co., Ltd.    500
Shanghai Lianheng Isocyanates Co., Ltd.    240
Total    2 540


Table 3    TDI producers in China, 2014  (kt/a)

Producer    Capacity
Bayer (Shanghai) Polyurethane Co., Ltd.    250
Shanghai BASF Polyurethane Co., Ltd.    160
Cangzhou Dahua Co., Ltd.    150
Gansu Yinguang (Ganzu Yinda (Juyin) Chemical Co., Ltd.)    100
NORINCO Group Liaoning Beifang Jinhua Polyurethane Corp.    50
Yantai Juli Isocyanates Co., Ltd.    80
Fujian Southeast Electrochemical Co., Ltd.    100
Total    890


2.3 HDI
Owing to its unique resistance to yellowing and aging, HDI is used extensively in automobiles, high-end aviation coatings, high-grade leather shoes and packaging materials. China’s HDI capacity in 2013 was 55 kt/a, output was 18 kt and consumption was 20 kt. Two foreign-funded enterprises are the major HDI producers. Bayer constructed a 30 kt/a HDI unit in Shanghai in March 2007. Bayer launched an HDI expansion project (from 30 kt/a to 50 kt/a) in March 2014 that is expected to be completed in 2016. A 10 kt/a HDI-series polyisocyanate project of Asahi Chemical Fine Chemical (Nantong) Co., Ltd. started production in Nantong at the end of 2007. Asahi Chemical also plans to expand in Nantong in the near future.
Shandong Runxing Chemical Co., Ltd. developed non-phosgene HDI technology and electric-synthesis adipic dinitrile technology in 2011, and also constructed a 1 kt/a HDI pilot production line and a 1 kt/a adipic dinitrile pilot production line. The company plans to construct a 100 kt/a HDI production line and a 300 kt/a adipic dinitrile production line. Ningbo Wanhua Polyurethane Co., Ltd. completed a pilot test of a 3 kt/a HDI production line in 2011. It constructed a 15 kt/a HDI unit in March 2012. A 15 kt/a HDI triplet curing agent commercial unit of the company also started production in 2013. Wanhua Chemical Group Co., Ltd. plans to own HDI monomer capacity of 30 kt/a, 20 kt/a for HDI triplet, 5 kt/a for HDI biuret and 15 kt/a for IPDI in 2015. In addition, Wanhua Chemical Group Co., Ltd. will also construct a second-phase HDI monomer and triplet unit in 2017.
2.4 HMDI
HMDI is used mainly in high-end sectors such as water-based polyurethane dispersions, plastic coatings and transparent elastomers. Yantai Wanhua Polyurethane Co., Ltd. has started R&D for the HMDI production from 2005, and a commercial unit will soon be put on stream. According to plans, the company will own a capacity of 10 kt/a HMDI in 2017.
The HMDI needed in China totally depends on import. The demand for HMDI is around 1 kt a year. HMDI is used mainly in the production of high-grade automobile repair paints and transparent elastomers. The price is very high. Owing to their excellent properties of light stability, weather resistance and mechanical processing, the demand for high-grade automobile repair paints produced with HMDI as the major raw material will rise. Moreover, HMDI can be used in leather-tanning slurries. It is expected that the demand for HMDI in China will reach 5-10 kt in 2015.
2.5 IPDI
IPDI has many unique properties and has therefore become a choice raw material for the production of polyurethanes that resists damage by light and weather. IPDI is used mainly in automobile finishes, rocket propellants, anticorrosive coatings, photo-curing coatings and adhesives. In addition, coatings produced from IPDI do not yellow. IPDI is gradually replacing TDI in coating production. It is expected that the demand for IPDI in China will reach 10-20 kt in 2015.
An isophorone and isophorone diamine integrated production base constructed by Evonik Industrial Group Co., Ltd. in Shanghai was fully completed in May 2014 and its capacity reached 50 kt/a. Bayer MaterialScience Co., Ltd. announced in 2011 that it planned to construct an IPDI unit at the China Bayer Shanghai Integrated Base. The project will be completed and put on stream in 2015. A 60 kt/a isophorone unit of Ningbo Qianyan New Material Technology Co., Ltd. started production in 2014. Wanhua Chemical Group Co., Ltd. will own a capacity of 15 kt/a IPDI in 2015.