BASF, the world's largest chemical company, is considering postponing construction of a methylene diphenyl diisocyanate (MDI) plant in Chongqing City, southwestern China, sources reported.

Previously, the Germany-based company's China subsidiary made an announcement saying that the global MDI market is likely to shrink in 2009 and that China will be no exception.

BASF's Chongqing MDI plant is to have a production capacity of 400,000 tons of crude MDI which will be used to produce the polymers for refrigerators and shoes.

In January, BASF received approval for its Chongqing plant from the Ministry of Environmental Protection. The project is currently under review by China's National Development and Reform Commission (NDRC).

On Mar. 9, 2009, Chinese regulators also said the country will limit approval for ethylene production projects to prevent excess capacity.