Tight BD forces BASF to declare FM on North American ABS

26 February 2010 20:49  [Source: ICIS news]

(Recast with BASF confirmation of force majeure)

HOUSTON (ICIS news)--Global chemical maker BASF declared a force majeure (FM) on acrylonitrile-butadiene-styrene (ABS) in North America on Friday as a feedstock shortage reached critical levels.

The company said in a letter to buyers that the FM “is necessary due to the inability to obtain adequate butadiene supplies.” A BASF spokesperson confirmed the FM.

BASF said it did not know when the 130,000 tonne/year Altamira plant in Tamaulipas, Mexico, would restart production. Current ABS orders from the plant would be delayed or reduced, the company said in its letter.

US butadiene (BD) producers have placed customers’ supplies on 65-75% allocation amid tight supply. That has led to ABS producers clamouring for BD just as demand in their own market started resurging after a slow 2009. 

BASF is the second ABS supplier serving the US that has called an FM this quarter. Producer INEOS said it was sold out of seven grades of the thermoplastic until April, citing its own problems obtaining feedstock.

The sole North American ABS producer still operating, SABIC Innovative Plastics, has implemented lead times of up to six weeks for orders and has had to turn down some new inquiries for material, sources said.

Global chemical market intelligence service ICIS pricing  assessed medium-strength extrusion ABS at 105-115 cents/lb ($2,315-2,535/tonne, €1,713-1,876/tonne) on 19 Feb, and sources said they expect to see further increases until the supply situation becomes more balanced.

“With BASF’s force majeure, all ABS is going to be going higher,” one trader said. “It is going to be a first-come, pay-highest kind of deal.”

($1 = €0.74)

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