Surviving a binder shortage: growing global demand and rising energy costs spelled disaster for the phenolic urethane nobake binder market in 2004-05. Knowing alternative binder options can help stave off blows to production during future supply shortages.

Rising feedstock and energy costs in 2004-05, along with tightening global supply and demand, caused significant price increases of dipthenylene methylene diisocyanate (MDD, an ingredient in phenolic urethane nobake and coldbox binders. In the same time period, several plant outages and turnarounds at factories producing MDI tightened up the supply, leading to severe shortages. At the time, metalcasters were forced to take the price increase on the chin while they scrambled to find enough binder to keep up with production.

Since then, global supply and demand conditions have mitigated, and new capacity has been installed. But, in the event of another supply shortage situation, metalcasters can incorporate a few strategies to survive.

Global Market Affects Domestic Supply

MDI is mainly used in the production of rigid and semi-rigid polyurethane foams, which is mostly consumed by the construction industry and in the forest products industry in the production of oriented-strand board, accounting for 80% of global consumption. Metalcasting uses of MDI account for 2-3% of the North American market.

Three or four types of polymeric MDI are used for metalcasting applications: high viscosity, high functionality for nobake applications; medium viscosity, mid-functionality for both nobake and coldbox applications; and several low viscosity, low functionality isocyanates for coldbox applications (Table 1). Table 2 shows typical physical properties for the four commonly used types of MDI for metalcasting applications.

For production of urethane coldbox and nobake systems, most North American binder suppliers use polymeric MDI manufactured in the U.S. However, the situation that affected the metalcasting industry in late 2004 into the first quarter of 2005 was caused by worldwide supply and demand for MDI.

Global demand became an issue as worldwide uses for ioscyanates expanded, particularly in China. It is generally believed that U.S. suppliers found that they could sell their MDI products into higher value markets than in the U.S., so excess material was quickly shipped and sold overseas.

In mid-2004, demand began to exceed capacity, and in April 2004, MDI suppliers began to raise their prices, primarily due to foreign demand and rising feedstock and energy costs. The feedstocks for MDI are benzene, which is driven by the cost of crude off, chlorine and natural gas. Crude oil averaged $28/barrel in 2003, more than $70/barrel by 2005, and now is $60/barrel, the lowest level in six months. Natural gas, which averaged $5.39/million BTU in 2003, increased to more than $13/million BTU by 2005. But, it is now at a two-year low of $4.89/million BTU.

The persistently high crude oil and natural gas prices were brought on by high demand, limited production increases, geopolitical unrest and hurricanes. Figs. 1 and 2 show the supply and demand for 1998-2006 and industry demand/capacity vs. operating capacity for 1990-2010.

[FIGURE 2 OMITTED]

Plant Shutdowns Heighten Shortage

With the MDI capacity already exceeded, the stage was set for a crisis. In 2004, Dow Chemical was in the process of constructing a new 500 million-lb. plant for polymeric MDI at its Freeport, Texas, facility. Startup was scheduled for early 2005, and part of Dow's plan was to phase out and close an older 500 million-lb, plant in LaPorte, Texas. Late in 2004, Dow began running into production problems related to its equipment at the LaPorte facility. On Nov. 17, 2004, the company declared force majeure on MDI, which freed the company fromliability or obligation. Force majeure can be invoked when an extraordinary event beyond the control of the party, such as war, strike, riot, crime or act of God, prevents the company from fulfilling those obligations.

Two days later, Bayer declared force majeure, as well, this time due to an unexpected shutdown of one of its MDI units and related problems during a planned expansion at its other unit in Baytown, Texas.

Both suppliers immediately placed their customers on allocation of available MDI, which is typically the amount of material a customer took during a previous period of time divided by the allocation amount, which is the percentage of available material.

For metalcasting binder suppliers, this left only BASF as the available MDI supplier during that time period. But, in mid-February 2005, BASF also declared force majeure and started allocation as they took their production facility in Gelsmar, La., down for a "needed turnaround" to replace catalyst and to "debottleneck" the plant for greater production.

By April 2005, all suppliers had removed their force majeure and MDI allocations, but the damage was done: prices for MDI had doubled from April 2004 to April 2005 and would not likely return to earlier levels.

Now, the current polymeric MDI market situation is finely balanced. Global capacity is about 3,100 million tons, with 2004 sales at 3,000 million tons. Capacity utilization in 2004 was 96%, with a long-term growth rate of 5-6% projected until 2010.

Supply tightened up again following the Katrina and Rita hurricanes, which disrupted production, and Dow continues to have production problems at its new Freeport facility. However, the additional incremental volume provided by domestic suppliers, along with slower demand for MDI from China and domestic automotive and laminate markets, has eased the pressure on demand.

Winning Strategies

Metalcasters using phenolic urethane binder systems can employ a few strategies during disruptions and allocations to avoid being short-stocked. Many metalcasting facilities used these methods to survive the binder shortage in 2004-05.

First, large urethane users should qualify a second source. Contract and spot buyers of MDI may have different availability and allocations. Where one supplier may not have material, another may have limited volumes to sell. However, there are risks with this strategy, particularly if the metalcaster is under contract with a specific supplier.

A second effective strategy is to consider binders using lower amounts of MDI. For instance, in urethane no-bake, the binder was formulated with 60-75% MDI. By going to a lower concentration of MDI, metalcasters can assure themselves of receiving all the material they need to continue operations.

Another option is to look at a different MDI functionality. During the supply crisis, mid-functionality isocyanate was the most plentiful and the most available. Changing from a binder using high functionality to one that contains mid-functionality will affect the performance of the binder only slightly and can be a valuable short-term solution.

Figs. 3 -5 illustrate the tensile strength development, reactivity and hot strength of three levels of polymeric MDI (in this case, high functionality MDI). In the case of tensile strength development (Fig. 3), while the systems showed some differences in strength development, the differences were relatively small and within 20% of each other. All are usable in metalcasting applications.

As seen in Fig. 4, in terms of reactivity, no significant differences were seen in work and strip times where either the amount or type of MDI was varied.

Finally, hot strength was evaluated using the British Cast Iron Research Association (BCIRA) hot distortion test "time to failure" as a measure of hot strength on an equivalent basis, recognizing that mid and low functionality MDI generally give lower hot strength (Fig. 5). In this test, 71% mid-functionality gave about the same hot strength as did 60% high functionality.

There are downsides to this approach, however. If MDI content is lowered, the solids content is replaced with aromatic solvent, which increases the content of both volatile organic compounds and hazardous air pollutants. It also will increase the amount of smoke and odor during coremaking, pouring, cooling and shakeout operations. These alternatives are offered as short-term strategies only.

Nitrogen content also increases as functionality of MDI decreases. For instance, the nitrogen content of a 68% mid-functionality binder is roughly 15% higher than 60% high functionality, which may be a concern in steel. However, iron oxide additions can mitigate this effect.

This article is based on a paper, "Urethane No-Bake Part 2 Supply," presented at the 2005 Steel Founders' Society of America Technical and Operators' Conference.

About the Author

Douglas Trinowski is the vice president of technology at HA International LLC, Westmont, Ill.

For More Information

"Benchlife: The Core Quality Issue," AFS Molding Div. Cured Sand Committee (4-1), MODERN CASTING, Oct. 2003, p. 31-33.

Douglas M. Trinowski HA International LLC, Westmont, Illinois 

Table 1. Viscosity and Functionality of MDI Used in Metalcasting

Ave. Functionality   Polymeric MDI description   Main applications

2.1-2.4              Liquid, low functionality   Coldbox and nobake
                     polyisocyanates
2.7                  Low viscosity polymeric     Coldbox and nobake
                     MDI
2.8-3.1              High functionality          Nobake
                     polymeric MDI

Table 2. Typical Physical Properties of the Four Common Metalcasting
MDIs

Functionality          2.2-2.3   2.3-2.4   2.7     3+

Viscosity@25C, cps     50        60        200     2000
Refractive index@25C   1.616     1.615     1.622   1.632

Table 3. Current U.S. MDI supply

Producer                        Capacity (million lbs.)

BASF, Geismar, La.                         575
Bayer, Baytown, Texas                      505
Bayer, New Martinsville, W.V.               80
Dow Chemical, Freeport, Texas              500
Huntsman, Geismar, La.                     820
Total                                    2,480

Fig. 1. Shown is the global MDI supply and demand for 1998 through
2006.

                1998   1999   2000   2001   2002   2003   2004   2005

BAYER            707    757    772    772    792    792    792    820
HUNTSMAN         455    455    555    850    850    850    850    850
BASF             433    433    400    540    580    580    620    620
OTHERS           348    865    373    393    410    410    410    440
DOW              385    385    400    500    500    500    500    550
Global Demand    348    865    373    850    410    410    410    440

                2006

BAYER            820
HUNTSMAN         970
BASF             740
OTHERS           480
DOW              550
Global Demand    480

Note: Table made from bar graph.

Fig. 3. Different levels of MDI show relatively little difference in
tensile strength.

                         Pull Time

             10 min.   1 hour   2 hours   24 hours

71% mid        110       245      217       301
71.5% high     101       202      237       252
65% high       100       197      228       288
60% high        86       186      197       235
68% mid        116       227      235       283

Fig. 4. No significant differences were seen in work and strip times
for different amounts of MDI.

                  Reactivity

             Work Time   Strip Time

71% mid         3.7         5.8
71.5% high      3.7         5.2
65% high        3.9         5.7
60% high        3.9         5.8
68% mid         3.8         5.8

Fig. 5. In a BCIRA hot distortion test, 71% mid-functionality MDI had
roughly the same hot strength as the 68% mid-functionality MDI.

             Part 2 Type

71% mid        53.7
71.5% high     61
65% high       59.5
60% high       55.7
68% mid        55.5