FRANKFURT, Jan 31 (Reuters) - Germany's BASF will build a new plant for chemicals used in rigid insulation foams, part of a plan to double output capacity in North America over the medium term amid strong demand.
Construction at BASF's chemical complex in Geismar, Louisiana, will start early in the second quarter with a view to boosting annual production capacity for methylene diphenyl diisocyanate, or MDI, to close to 600,000 tonnes from 300,000 tonnes.
Basic petrochemicals such as MDI - where BASF competes with Covestro, Huntsman and Wanhua - have been in short supply across the industry as chemical companies have underestimated demand growth, boosting prices and earnings.
MDI is used in rigid foams to insulate buildings and fridges and for light-weight automotive materials. (Reporting by Ludwig Burger; Editing by Christoph Steitz)