BASF (Ludwigshafen, Germany; www.basf.com) and Huntsman (Salt Lake City, Utah, USA; www.huntsman.com) plan to dissolve the joint venture Shanghai Lianheng Isocyanate (SLIC) by the end of the year. The company produces MDI in Caojing, China’s largest isocyanate production site. However, the move is not expected to change available capacities from either group for the time being. Together with third producer Covestro, almost 1.5 mn t/y of MDI output is located in Caojing.  

Both BASF and Huntsman said they can better guarantee the supply to their Asian customers in this way. However, in view of the current cost-cutting efforts at BASF, at least on the German side, it is more likely that a better integration of the plants is hoped for to achieve savings targets. An end of savings measures at the German company has probably not yet been reached amid talk of postponing investments and fewer flights, but at least there will be no further plant closures for MDI, a spokesperson told Plasteurope.com.

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Huntsman, together with Chinese company Shanghai Chlor-Alkali Chemical, plans to take over the older of the two MDI lines of equal size, each with a capacity of 240,000 t/y. Added to this is chlorine production via hydrogen chloride recycling. 

The second MDI production facility, which came onstream in 2017, goes to BASF alongside Sinopec subsidiary Shanghai Gaoqiao Petrochemical, including production facilities for precursors aniline and nitrobenzene, which are also located there. 

So far, BASF and Huntsman each hold 35% of SLIC, and Sinopec owns the remaining 30%. After the transactions, the two Western groups will each hold 70% of the two new joint ventures while Sinopec remains a minority shareholder with 30% each.