Production Issues at TDI Plants in Europe May Impact Automotive and Aerospace Manufacturers

Production Issues at TDI Plants in Europe May Impact Automotive and Aerospace Manufacturers

As production remains disrupted at the two largest chemical producers of toluene diisocyanate (TDI) in Europe, downstream customers in the aerospace and automotive industries that depend on this chemical material for various final applications have faced higher prices and canceled orders in recent weeks. With German chemical makers BASF and Covestro both declaring force majeure on the supply of TDI in the last two months, supply shortages could last until the end of the year, potentially causing temporary production stoppages at customers with particularly low stock levels that are unable to secure alternative supply in time.

TDI as a key ingredient for manufacturers

The European TDI market has been mainly impacted by two events since September 2020, which have reduced output by up to 70 percent. First, chemical producer BASF declared force majeure at its plant in Ludwigshafen, Germany in early September due to technical issues. This was followed by another force majeure declaration by polymers producer Covestro, following a pump failure at its Dormagen plant in Germany. Both affected TDI units account for the majority of European supply, with a capacity of 300,000 tonnes/year each. Other players in Europe include BorsodChem, which operates a plant in Hungary, and Vencorex’s plant in Point-de-Claix, France.

TDI is mainly used in the production of flexible polyurethane foams in bedding and packaging applications as well as automotive and aircraft seats. When used in polyurethane elastomers, end applications can also include products such as auto bumper covers and dashboards, industrial rollers, shoe soles, and various mechanical goods.

MaterialEnd Product
Toluene diisocyanate (TDI)Automotive seats
Airline seats
Bedding and furniture
Automobile bumper covers and dashboards
Paints and coatings
High-performance anti-corrosion coatings
Table 1: Notable end products containing TDI. Source: Everstream Analytics

Supply shortage causes order cancellations and price hikesProduction constraints of TDI in Europe have already started to ripple through the downstream supply chain, with some foam producers facing delays in raw material orders, and in some cases, even canceling customer orders. Despite a high demand for foam-based products, some producers may be forced to adjust production schedules in the coming months should the supply shortage worsen. Similar TDI shortages in 2016 and 2017 caused a handful of producers of polyurethane foam to temporarily halt production after production problems were reported at BASF in Ludwigshafen. Underlining the currently strained situation, TDI prices in October have increased for the fourth consecutive month in Europe, and have now reached levels last experienced in 2018.


As of October 23, Covestro reportedly restarted its TDI unit in Dormagen; however, the force majeure situation remains in place. On the other hand, BASF announced it was planning to restart production in Ludwigshafen in the coming weeks. With neither company providing a specific date for the lifting of the force majeure, limited supply availability and higher spot market prices could potentially continue at least through December 2020.

Customers in the automotive and aerospace markets, who rely on TDI supplies for their manufacturing processes in Europe, should keep abreast of the situation at Covestro and BASF, and examine whether alternative raw material can be secured from other sources. Wanhua-BorsodChem’s plant in Hungary is currently operating at a capacity of 250,000 tonnes/year following its completed maintenance in September. Other alternatives overseas include Sadara Chemical in Saudi Arabia, a joint venture between Dow Chemical and Saudi Aramco.

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