Polyurethane supplies could be tight next year.

Overall domestic performance of polyurethanes in 1995 continues to be strong, according to Richard L. Beitel, director of sales for polyurethanes, Dow Plastics, North America. "Supply in 1996 could be tight due to current capacity limitations. The North American industry sees overall volume increases averaging 6-8% from 1994 to 1995," said Beitel. "There could be further growth, but it will be incremental for the time being due to capacity issues."

Comparing 1993 with 1994 industry figures, polyols grew 11%, while TDI and MDI showed growth increases of 4% and 18%, respectively. "Strong performance in TDI and MDI is expected to continue throughout 1995," said Beitel. "The global demand for propylene oxide (PO) is tight, which is anticipated to hold volume increases at 4% in 1995, consistent with 1995 U.S. gross domestic product (GDP) figures."

Industry volume figures showed that flexible slabstock foam grew 6% and flexible molded foam grew 11% last year. The strong growth in flexible molded foam reflected better demand in the automotive market. According to Beitel, the percentage of growth is anticipated to level off in 1995 as the automotive industry sees a build-up of inventory due to slowing of the economy and less demand for durable goods.

To support customer need and market growth, Dow announced the following PO expansions:

* June 1995 - increased the Plaquemine, LA facility's capacity by 100 million pounds.

* March 1996 - will increase the Freeport, TX plant's capacity by 250 million pounds.

* June 1996 - will increase the Stade, Germany plant's capacity by 100 million pounds.

* January 1997 - will increase the Aratu, Brazil plant's capacity by 100 million pounds.

Dean Abrassart, product manager, Dow Plastics, North America, said "Growth in the end markets in North America, as well as rapidly expanding growth in the Pacific region, continues to drive demand. Through July 1995, domestic polyol demand is ahead by 4% for the same time period in 1994, and ahead by 20% for the same time period in 1993. Exports are nearly flat for 1995 versus 1994, but still ahead of 1993 by nearly 15%."

In 1994, Dow completed a 300 million pound capacity expansion for polyols at its Freeport, Texas facility. In addition, the Zhejiang Pacific Chemical Corp., a joint venture between Dow and Zhejiang Chemical Factory in People's Republic of China, began production in 1994 with a capacity of 44 million pounds.

"TDI (toluene diisocyanate) continues to operate at, or over, capacity with U.S. trade volumes ahead by nearly 8% through July 1995 compared with the same time period in 1994. This strong domestic demand has resulted in reduced exports, nearly pound for pound," said Abrassart.

Due to high global demand for MDI, Scott Prochazka, product manager, says Dow and other key players in the chemical industry all have global operating rates approaching 100% of stated capacity. "Supply will likely remain very tight for the next 12 months, with modest relief when Dow's Stade, Germany expansion is complete," he said. "Demand has been driven by strong growth across essentially all markets, in all regions. Future growth is expected to be led by construction and adhesives applications with automotive, appliance, and other durable goods following close behind."

"In the past, we've said that 1.45 billion pounds of MDI capacity in North America by the year 2000 for the industry as a whole would not be unexpected," said Prochazka. "However, if demand growth remained at a conservative five percent per year, even 1.45 billion pounds would not be enough to cover domestic needs, let alone export needs. "He said that MDI production has increased by 13% in North America over last year's figures.