Eastern Europe BPA producer cuts rates by 20%

22 November 2007 12:10  [Source: ICIS news]

LONDON (ICIS news)--An eastern European bisphenol-A (BPA) manufacturer has been forced to reduce production by around 20% this week due to a lack of phenol feedstock deliveries resulting from the German rail strike, a company source said on Thursday.

 

“We may need to reduce BPA production further if we do not receive the outstanding supplies by tomorrow,” said the seller.

 

Downstream, epoxy resin production was also reduced at the site, although precise operating rates were not disclosed.

 

The source said that it was still managing to cover its contractual obligations, but speculated that some shortages could be likely if logistical difficulties were to continue.

 

Other BPA manufacturers were already forced to cut back production following INEOS Phenol’s force majeure on its supplies in late October.

 

There were growing concerns about BPA availability in December, according to the sell-side, as they were just about managing to cover November contracts and were now contending with logistical issues on top of already limited phenol availability.

 

A few sellers said they had planned to take advantage of the traditionally quieter Christmas period to build up stocks, but they had not yet seen evidence of any significant seasonal slowdown, reporting healthy sales.

 

Some buyers said they had secured sufficient BPA volumes in November and were not aware of any supply issues in December.

 

Looking to December, firm targets were not yet discussed, as several market players were continuing to assess the market.

 

However, one seller said it would target minimum hikes of €20/tonne, noting that it had already secured increases of €20-€30/tonne for some December business.

 

Buyers, however, were looking for a rollover, with one customer speculating that upstream issues could still be counter-balanced by a quieter period in December.

 

($1 = €0.67)

 

By: Heidi Finch
+44 20 8652 3214

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