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17 May 2017

Key Chemical Shortage Causing Insulation Woes for Builders


Methylene diphenyl diisocyanate (MDI) is a largely unknown chemical to the general public, but for insulation suppliers and therefore builders it is a crucial component of the trade. The chemical is a key ingredient in the production of rigid insulation panels, widely used in the construction industry, and so the current global shortage of MDI is a definite cause for concern.

Just last month, thermal insulation manufacturer Kingspan announced that due to these global shortages driving up prices for the material, their profit margins would be squeezed in the first half of this year before rising MDI costs are fully recovered from customers.

Then the situation got worse.

Covestro, a leading supplier of MDI in Europe, announced around two weeks ago that “an unforeseeable production issue” at their Brunsbuettel site in Northern Germany had forced them to cut delivery of the material across Europe and other regions.

As a result, insulation manufacturers including Kingspan, Quinn Industrial Holdings, and Xtratherm have all now limited the supply of certain insulation products.

A spokesman for Quinn Industrial Holdings (QIH) commented on the shortage, “Given continued supply constraints of MDI, QIH, in common with the broader industry, continues to adapt a managed approach in customer allocations.”

Meanwhile, a spokesman for Kingspan said of the situation, “Sourcing MDI is one of many supply-chain issues that are an everyday part of running our business. All customers affected by the current situation have been informed, and we are working with them to ease the impact on their businesses.”

Due to the way in which manufacturers tend to base supply on the average volumes bought by customers in the previous year, the shortage of MDI-based insulation is expected to hit small firms the hardest. Some are looking towards alternatives such as wool-based insulation in an effort to offset the negative impact of the shortage, but this can’t really be described as a fix. For now, we can only hope that the issue will be resolved in good time. 


Sam Bonson

Sam is an aspiring novelist with a passion for fantasy and crime thrillers. He is currently working as a content writer, journalist & editor in an attempt to expand his horizons.