NANDINI CONSULTANCY CENTER

GLOBAL SCENARIO ON TOLUENE DIISOCYANATE (TDI)

March 2010

Global Scenario on TDI

Toluene diisocyanate (TDI) is white to pale yellow liquid which is a vital raw material for flexible polyurethane foam. Flexible PU foams are used in cushions, mattresses, garments, pads and gloves and packaging materials, which find application as cushioning material for automobiles and airline, furniture and mattresses. CAS No. Chemical formula Appearance Odour Solubility 584-84-9 C9H6N2O2 White to pale yellow liquid Sharp pungent odour Soluble in ether, acetone and other organic solvents Reactivity Chemical: TDI reacts readily with compounds containing active hydrogen, such as acids and alcohols. Contact with bases, such as caustic soda or tertiary amines, may cause uncontrollable polymerization and rapid evolution of heat. Water: On contact with water, aromatic poly-substituted ureas are formed and carbon dioxide and heat will develop. In time, white aromatic polyurea crystals will precipitate. Heat: High temperatures can cause formation of dimer and discoloration of the TDI. This phenomenon is time temperature related

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Global Scenario on TDI

Producers specification Name of the producer Description Grade Assay, min (%) Isomer Ratio (%) 2,4-isomer 2,6-isomer Acidity, as HCI (%) Hydrolyzable Chlorides (%) Chlorine, max (%) Color (APHA) Safety and hazards TDI is toxic by inhalation. It is a strong irritant to the skin and tissue, especially to the eyes. As the vapours of TDI bring irritation to the tract, adequate ventilation is needed for the safe handling of the product. NIOSH study on TDI health effects The National Institute for Occupational Safety and Health (NIOSH; Washington) diisocyanate panel purposes to study the possible health effects of TDI. NIOSH says that occupational asthma is one of the health problems that will be investigated. It will look at which workers could be at risk, what controls employers are using to help reduce that risk, whether those controls are effective and where controls may be needed. Packaging and storage TDI should be kept in dry container and should be kept away from heat Packages must be stored in dry room at temperature below 35 deg C T80 >99.5 80+1 20+1 <0.004 0.007 <0.07 <40 Perstorp, France Value T65 >99.5 68+1 32+1 0.005 0.010 <0.1 <40 TX >99.5 >95 <5 <0.0015 <0.01 <0.10 <40 T100 >99.5 <99.0 <1.0 <0.0130 <0.0150 <0.07 <30

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Global Scenario on TDI

TDI can also be stored in containers in nitrogen or air atmosphere at relative humidity below 0.003%.

Description of packaging and for transportation Dry, clean and hermetic zinc coated drums designed for transport of medium dangerous materials. Road-tankers 20 feet iso-containers

Capacity 200 litre

Approx. 22 metric tonnes Approx. 22 metric tonnes

Application sector Flexible polyurethane foam TDI is a vital raw material for flexible polyurethane foam, for use in cushions, mattresses, garments, pads and gloves and packaging materials, which find application as cushioning material for automobiles and airline, furniture and mattresses.

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Global Scenario on TDI

Application sector of flexible polyurethane foam Application sector Furniture Automobiles Padding & Lining Nature of application Mattresses, Pillows, Quilts Seats, Lining, Sun Visors Garments, Shoes, Diaries, Carpets, Brief Cases, Bags, Purses etc Electronic Items, Frozen Foods, Medicines, Audio-Video Computer CDs. Shampoos, Wax, Shoe Polish, Household Chemicals Toys etc.

Packaging

Applicators Miscellaneous

Other miscellaneous application sector TDI is also used to produce polyurethane coatings, rigid foam adhesives, sealants and PU cast elastomers. Process outline The starting point for the manufacture of TDI is the dinitration of toluene to produce dinitrotoluene followed by catalytic hydrogenation to diaminotoluene either as the 2,4- or 2,6 isomer or a mixture of the two. The diaminotoluene is dissolved in an inert solvent and reacted with phosgene to produce a crude TDI solution which is distilled. TDI is most commonly formulated as the 80:20 mixture of the 2,4 and 2,6 isomers. Technology development by Bayer The process was developed at a 30,000 tonnes per year pilot plant at Dormagen, Germany that Bayer has operated for more than one year

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Global Scenario on TDI

The technology uses a gas-phase phosgenation step to convert toluylene diamine (TDA) into TDI, rather than the conventional liquid-phase process. The advance is claimed to reduce investment costs by 10 to 20% and cut energy costs by one-third. In addition, it results in a significantly reduced hold-up of hazardous substances during the process, in particular, phosgene, thus improving safety. The new technology reduces investment costs involved in constructing production plants by 10% to 20% and reduces energy consumption by onethird and sets new safety standards Bayer will consider using the new technology when constructing TDI units in Europe in the future Source of technology The two main licensed processes are Sulfolane and UDEX. Shell owns Sulfolane technology and Dow Chemical obtained the UDEX technology when it took over Union Carbide. Chematur Engineering licenses a low pressure phosgenation process while Befs Prokem and Sulzer Chemtech offer cyrstallisation purification technologies. A non phosgene process developed in Japan involves the carbonylation of dinitrotoluene. The product of this reaction, a diurethane, is converted thermally to toluene diisocyanate and alcohol. GLOBAL DEMAND SUPPLY SCENARIO Global installed capacity Period 2010 2.213 million metric tonnes per annum Global productionPeriod 2010 2.01 million metric tonnes per annum

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Global Scenario on TDI

Global installed capacity trend Period 2001 to 2010 In million metric tonnes

2.5

1.5

0.5

2003 1.463

2004 1.552

2005 1.865

2006 1.743

2007 1.903

2008 2.063

2009 2.113

2010 2.213

Capacity

Projected installed capacity - Period 2012 to 2014 Period 2012 *2014 Global producers Americas Capacity in million metric tonnes per annum 3.573 3.438

Bayer MaterialScience BASF ##Dow Chemical Dow Brasil Nordeste (Formerly known as

Baytown, Texas, US Geismar, Louisiana, US Freeport, Texas, US Ltda Camacari, Brazil Isopol

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Global Scenario on TDI

Produtos Quimicos) Petroquimica Rio Tercero ##Dow Chemical

Rio Tercero, Argentina

Dow plans to shut the facility at Freeport, Texas, USA down permanently from the second quarter 2010 due to lack of economic viability. It is expected that the closure would have little impact on the US polyurethanes markets. Europe Bayer MaterialScience Perstorp (Acquired from Lyondell) BorsodChem BASF Bayer MaterialScience Zaklady Chemiczne Zachem Bayer MaterialScience, Brunsbttel , Germany Pont de Claix, France Kazincbarcika, Hungary Schwarzheide, Germany Dormagen, Germany Bydgoszcz, Poland Tarragona, Spain

Asia Pacific and others Shanghai BASF Polyurethane BASF Mitsui Chemicals Polyurethanes Mitsui Takeda Chemical Inc **Gansu Yinguang TDI Korea Fine Chemical (KPX Fine Chemical) Jinhua Polyurethane Company OCI Company Ltd ( Formerly DC Chemical ) Shanghai Wusong Chemical General #Nan Ya Plastics China National Blue Star Nippon Polyurethane Industry Caojing, China Yeosu, South Korea Omuta Japan Kashima, Japan Baiyin, China Yeosu, South Korea Liaoning province, China Kunsan, South Korea Shanghai, China Mailiao, Taiwan Taiyuan, China Nanyo, Japan

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Global Scenario on TDI

Yantai Juli Isocyanate Cangzhou Dahua

Laiyang, China Hebei, Cangzhou, China

Cangzhou Coastal Port Gujarat Narmada Valley Fertilizers Bharuch, India Company Ltd, # Nan Ya Plastics, Taiwan Nan Ya Plastics has been shut down since November 2009, since the plant is facing some unspecified problems. The company plans to keep the plant shut through 2010. The company did not indicate a restart date. Source: ICIS Chemical Business, Feb 15 21, 2010 Polymer Update, Feb 2010

**Recently commissioned projects Additional capacity created in metric tonnes per annum

Name of the company

Location

Date of start up

Remarks

Cangzhou Dahua Co,

Cangzhou Coastal Port

50000

Dec 2009

Built an additional 50000 metric tonnes per annum of TDI capacity Expanded from 50000 to 100,000 metric tonnes per annum

Gansu Yinguang Chemical Industry Group Plant closures

Baiyin, China

50000

2010

A number of TDI plants have been closed in recent times due to several factors such as lack of economic viability for a particular producer etc., though the overall global demand scenario for TDI has been showing steady growth trend. Present Global demand Period 2010 (Estimate)

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Global Scenario on TDI

2.01 million metric tonnes Application sectorwise Demand Flexible foam The main use for toluene di-isocyanate (TDI) is in the manufacture of polyurethane (PU) flexible foams. These are used in upholstery, mattresses and automotive seats. Flexible polyurethane foams versatility of form and function can be seen in bedding, furniture, automotive interiors, carpet underlay and packaging. Foam can be created in almost any variety of shape and firmness. In addition, it is light, durable, supportive and comfortable.

Global application sectorwise demand Application Sector Flexible PU foam PU elastomers Adhesive and sealant Surface coating Total Global application sectorwise demand pattern
Surface coating 9% Adhesive and sealant 4%

Demand in million metric tonnes 1.69 0.06 0.08 0.18 2.01

PU elastomers 3%

Flexible PU foam 84%

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Global Scenario on TDI

INDIAN DEMAND SUPPLY SCENARIO Indian producer Gujarat Narmada Valley Fertilizers Company Ltd., India Plant location Plant capacity Bharuch, Gujarat 17000 metric tonnes per annum

Details on production and sales of TDI in the recent past Period (April to March) 2006-2007 2007-2008 2008-2009 Production in metric tonnes 15943 16546 12636 Sales in metric tonnes 16641 16145 13118 Sales value in USD million 59.24 71.52 50.62

Capacity expansion of TDI The company has a proposal to increase the capacity of TDI to 50000 metric tonnes per annum in Dahej. Imports

Period (April to March) 2006 to 2007 2007 to 2008 2008 to 2009

Import 6,089 11130 12216

Export 819 219 267

Indian demand : Around 24,585 tonnes per annum

PROGNOSIS The demand for TDI polyurethane sector. is intimately related to the performance of

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Global Scenario on TDI

Demand for TDI reacts sensitively to economic activity, given that the majority of TDI output is in the furniture and automotive sectors.

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Global Scenario on TDI

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