By David Reed, UT EditorKazincbarcika, Hungary- Spectacular improvement in MDI (methylene diphenyl diisocyanate) and caustic soda product," lies behind the strong performance of Hungary's Borsodchem Rt, the only local source of isocyanate raw materials in eastern Europe, the firm reported 10 Aug. But the spectacular" apparently only applies to the revenue generated, as output from the plant itself fell 6.6 percent to 28.1 kt in the first half of 2005 versus the outstanding production volume of 2004," the firm reported.Borsodchem's total sales revenues for the first half of 2005 rose 19.5 percent, to HUF 86 700 million ($434 million), the firm announced, generating an operating profit of HUF 9400 million. Although repeating the outstanding Q1 performance was not possible, due to the changes in the product market … following the commissioning of the new assets we can further ensure our company's annual growth of over 20 percent," reported László Kovács, chief executive officer.Among these new assets are an MDI plant, a vinyl chloride monomer (VCM) and PVC capacity expansions, and a new chlorine plant due on stream by Q1 2006, BorsodChem's statement indicated.Commenting on the firm's isocyanates businesses, the firm said that the list prices of both crude and pure MDI have reached a record level due to the limited supply. A reverse tendency prevailed in the TDI (toluene diisocyanate) markets, though at a more modest pace, where the slight oversupply situation has resulted in some lower listing prices."In H1, the average list price of crude MDI was €2276/tonne ($1.27/pound) - over 55-percent higher than the H1 2004 average list price. The trend in price continued into Q2, which had a positive impact on the profitability of the product," the BorsodChem statement said. The price of pure MDI increased more slowly, by €244/tonne, the firm added.With TDI, however, the price trend was down: In H1 2005 TDI was listed at €1628/t onne average, €73/tonne lower than the average list price in H1 2004. The price of TDI continues to fall, BorsodChem reported, falling to €1554/tonne in the second quarter of 2005.The firm's isocyanates businesses were also squeezed by rising benzene prices and energy costs, BorsodChem added.One of the firm's other main businesses, PVC, showed a more drastic and unforeseeable negative tendency." Although the price of ethylene rose to €750 per tonne, the list price of PVC fell, largely due to Asian producers switching to acetylene-based VCM technology, which BorsodChem characterised as obsolete, environmentally damaging and inefficient."
