I will now turn the call over to Peter Huntsman, our President and CEO.
Peter R. Huntsman
Thank you very much, Kurt. Good morning, everyone. Thank you for joining us. Let's turn to Slide #3. Adjusted EBITDA for our Polyurethanes division in the first quarter 2012 was $177 million, an improvement of $63 million compared to the prior year of $114 million. Sales volume for our MDI products increased 4% compared to the prior year. We saw improved demand geographically in each of our regions and across the majority of our end market segments. Despite troubling economic headlines, we saw a growth in Europe with stronger demand in Northern Europe where we sell the majority of our product following the negative impact of the recession plague in Southern Europe. We continue to see growing demand in U.S. automotive and insulation. The Southeast Asia ASEAN markets have countered the slowdown in growth that we are seeing in China. We successfully raised our MDI selling prices in the quarter, which increased our contribution margin though these increases were partially offset by an increase in the cost of benzene. We expect further positive traction on our MDI average selling prices in the second quarter.
Propylene oxide and its co-product, MTBE, continue to perform very well, primarily as a result of an attractive spread between premium gasoline and lower price natural gas-based raw material. In the first quarter, we saw exceptional margins in part due to industry supply outages. Coupled with strong demand, these outages led to an increase of approximately $55 million to $60 million compared to the prior year and prior quarter. By the first 2 weeks of the second quarter, most of these idle facilities had restarted, so we do not expect this benefit to continue into the second quarter.Turning to Slide #4. In the first quarter, our Performance Products division earned $90 million of adjusted EBITDA, an increase of 50% compared to the prior quarter. We believe that the demand for amines is improving and production from new industry supply is being absorbed into the market. As a result, we saw increased margin and an improvement in volumes compared to the prior quarter. It will take a while, however, for the industry to ramp up to the profitable levels we enjoyed in early 2011. Our margins of a year ago also had some benefits from industry outages that carried some short-term margin expansions. We continue to invest in our Performance Products businesses. We recently announced the increase of our North American ethylene oxide capacity by 250 million pounds to supply our growing downstream ethylene oxide derivative businesses. This specific project represents one of the ways we are leveraging the North American low ethylene cost advantage to supply our downstream derivatives business in amines and surfactants. Our upstream businesses continue to perform well. It's worth noting, however, that we look forward to the -- that as we look forward to the remainder of the year, we will take our ethylene oxide unit down for planned maintenance in the third quarter of this year. This maintenance is performed once every 4 years, and we expect the EBITDA impact to be approximately $15 million. Read the rest of this transcript for free on seekingalpha.com