The growing demand from end use industries such as construction, furniture and home appliances is the major factor driving the market for MDI. Availability of abundant natural resources in the form of crude oil and natural gas (especially in Russia) is also propelling the growth of MDI market in the CIS. However, the market is inhibited by volatile pricing characteristics of benzene. Phosgene free MDI production process provides immense opportunities for participants to minimize the impact of MDI on environment and at the same time attain sustainability.

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The CIS demand for MDI in paints and coatings industry was estimated to be 37.9 kilo tons in 2011 and is expected to reach 55.6 kilo tons by 2018, growing at a CAGR of 5.7% from 2013 to 2018.

In terms of revenues, the market was estimated to be worth USD 91.9 million in 2011 and is expected to reach a market worth USD 158.6 million by 2018, growing at a CAGR of 5.9% from 2013 to 2018.

MDI (Methylene diphenyl diisocyanate) is an important aromatic diisocyanate, predominantly used in the production of polyurethane resins. Particularly, MDI is a key raw material for the production of rigid polyurethane foams which are used in construction, refrigerators, freezers etc. as insulation packing. Apart from polyurethanes, MDI also finds critical applications in paints, coatings, elastomers, adhesives and sealants.

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The various processes of manufacturing MDI follow a common chemical process. Firstly, aniline and formaldehyde react to produce diphenylmethanediamine (MDA). Secondly, MDA is then reacted with phosgene to produce MDI.

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However, the conventional process is controversial to some extent as it involves phosgene, which is highly toxic in nature. Also, formation of hydrochloric acid (HCl) as a by-product is a key issue as it is highly corrosive in nature and increases equipment maintenance costs.
The MDI distribution channel comprises of suppliers of the aromatic diisocyanates, TDI, polyurethane and the associated polyols. The producers of MDI also produce polyols among the major global players and some end up producing intermediates for making diisocyanates and polyols. BASF and Bayer have a diversified portfolio of raw materials. Dow mainly produces polyols whereas Huntsman produces MDI. Apart from system houses of these companies, there are many other independent system houses producing diisocyanates from customized applications. Some of the system houses producing diisocyanates are customized for some specific sectors like coatings or adhesives.

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