In recent years, the downturn in the automotive market in the United States and Western Europe has led to continued weakness in the isocyanate market in the region. At the same time, the vigorous development of the Asia Pacific region, especially the Chinese auto industry, has stimulated manufacturers to accelerate the pace of building isocyanate units in the region, resulting in global isocyanate production. The focus of the market moved eastward.
The American Chemical Industry Council (ACC) stated that car sales are a barometer of demand for chemical products. The U.S. auto industry consumes about 1.4 billion pounds (about 635,000 tons) of polyurethane (PU) each year, accounting for 21.6% of the total PU consumption. According to the latest data released by the China Association of Automobile Manufacturers, China’s auto sales have exceeded the 10 million mark for the first time this year. In the first 10 months of this year, China's automobile sales reached 10.9 million units, a year-on-year increase of 38%, and China has become the world's largest automobile production and sales country. General Motors sold 1.46 million vehicles in China, a substantial increase of 60% compared to the same period last year, setting a record high for the same period in history. The Ford Motor Company’s joint venture company in China, General Manager of Changan Ford Mazda Automobile Co., Ltd., told the media recently that the company’s passenger car sales increased by nearly 50% this year, spurred by the Chinese government’s preferential policies for the purchase of small-displacement cars.
In order to serve the rapidly growing automotive industry in China, major chemical companies around the world are investing more in Chinese isocyanates and polyols. The German chemical giant BASF plans to increase the production capacity of Chongqing's diphenylmethane diisocyanate (MDI) plant, and its 400,000-ton/year MDI plant built in Chongqing with Chongqing Chemicals (Group) Co., Ltd. is scheduled to begin commercial production in 2012. . The Chongqing project is BASF's second MDI joint venture project in China. After that, BASF's Shanghai Lianheng Isocyanate Co., Ltd.'s 240,000 t/a MDI plant has been put into production.
BASF's Asia Pacific strategic goal is to promote the growth of China's business, achieving an average annual growth of 4% to 5%, becoming the preferred supplier of paints, coatings, automotive, construction, packaging and pharmaceutical industries in the Asia Pacific region. According to its development plan, by the year 2020, about 70% of sales revenue in the Asia-Pacific region will come from localized production, and the number of employees in the Asian region will also increase from the current approximately 10,000 to 15,000.
Coincidentally, the Huntsman company in the United States is also seeking business opportunities in Asia. Huntsman CEO Peter Huntsman said that the MDI sales business in Asia will continue to be the growth engine of the company. Huntsman expects the global MDI market to grow at twice the rate of GDP growth, and most of the investment in the MDI industry will be concentrated in the Chinese market as the Chinese MDI market will grow at an average annual rate of 15%.
The main downstream markets for toluene diisocyanate (TDI) and MDI are PU foams, coatings, and adhesive products that are widely used in the automotive industry. Among them, elastic foam plastics are mainly used in seats, pillows, and armrests of the automotive industry; PU coatings are mainly used in the appearance of automotive bodies, such as high-polishing and scratch-resistant paints; PU adhesives are widely used in automobiles with excellent adhesion and shock resistance. industry. The average annual growth rate of global TDI market demand is estimated at 4% to 5%, and the demand growth of the US market will be lower than the global average.