Polyurethane precursor production stepped up

China's $1 billion (£530 million) isocyanate plant in Shanghai has started producing two key raw materials for the production of polyurethane. The plant, operated by German chemical giant BASF, US-based Huntsman group, and three Chinese partners, will turn out 240 000 tonnes of crude diphenylmethane diisocyanate (MDI) and 160 000 tons of toluene diisocyanate a year.The Chinese polyurethane market is expected to grow by about 10 per cent a year until 2015, according to BASF, when it will become the largest such market in the world.

'You just should not underestimate the growth in demand for MDI and TDI here,' said BASF board member John Fedmann in an interview for Shanghai Daily.

The three Chinese companies involved in the project are Shanghai Huayi, Sinopec and Shanghai Chlor-Alkali. BASF and Huntsman each own 35 per cent of the venture, the Chinese companies own the remaining 30 per cent.

Also in Shanghai, German chemical company Bayer is building the largest MDI production plant in the world. The plant, scheduled to start production in 2008, will have an annual capacity of 350 000 tonnes.