(Yicai Global) May 11 – BASF’s supply disruption due to a technical failure in a Belgian joint venture mainly affects the European market and has no impact on China, an insider at the German chemical giant says at Yicai Global.
Production of polyether polyol and polyether polyol-based polyurethane in the European, Middle Eastern and African markets has been halted due to technical difficulties encountered by a raw material supplier, BASF’s polyurethane plant in Lemförde has announced. May 5.
The supplier is a Belgium-based joint venture between BASF, headquartered in Ludwigshafen, and US-based Dow Chemical, which makes propylene oxide, a key ingredient in polyether polyol, Yicai Global has learned. The shutdown affected BASF, Dow and other chemical giants in Europe.
“There are currently no irregularities in supply from China, and we will immediately notify customers in writing if there are any,” a person linked to U.S. chemical producer DuPont told Yicai Global.
The recent spike in chemical material prices could be linked to the high cost of transportation, which is impacting demand, said a person close to U.S. specialty chemical maker Huntsman.
“Rising oil and natural gas prices will definitely result in more expensive chemical materials, because these are the basic materials,” said Ma Dawei, a fellow of the Chinese Academy of Sciences and a researcher at the Institute. Shanghai Organic Chemistry Institute of CAS.
Many factories of foreign companies in Shanghai are getting back to work amid the Covid-19 lockdown, now in its second month, to help ease pressures on the global supply chain. “Our workers remain at the plant in so-called closed-loop management and the plant is operating. The return to the laboratory from the head office is being organised,” said an insider at Swiss specialty chemicals manufacturer Clariant.
US adhesives giant 3M’s four factories in Shanghai began closed bubble operations on May 7 and are gradually increasing capacity. “While the delivery of raw materials and finished goods has improved, we are still having logistics issues as transportation companies are getting back to work quite slowly,” the Minnesota-based company said.
“We have obtained permits for inter-provincial transport, but this only partially solves our logistical dilemma because the volume we have to transport is much higher than what the permits allow,” he added.
Editors: Liao Shumin, Kim Taylor