France rail strike begins to hurt cracker operators, derivatives

20 April 2010 16:43  [Source: ICIS news]

By Heidi Finch

LONDON (ICIS news)--French cracker operators and derivative manufacturers are feeling the effects of a prolonged rail strike with the possibility of capacity cuts and even shutdowns if it last much longer, market players said on Tuesday.

“We are losing production all the time, we may have to shut down if the strike isn’t over tomorrow,” said one derivative manufacturer.

The source said it was hoping the strike would break on Wednesday, as a round table discussion between management and trade unions was expected to take place.

The supply chain was being disrupted, said the source, adding that it had already lost a week of production as not enough propylene could come in and be used, so manufacturing was well below full capacity.

One cracker operator in the region said: “The rail strike is causing issues for some olefins sites, but it is being managed up until now, but it can’t last too long. There is a strong desire from the industry that the rail strike comes to an end.”

Some players were switching from rail tank cars to trucks in order to minimise the impact of the rail strike, which has so far lasted for 14 days, but supply of trucks were also limited as a result.

One derivative customer said it could not deliver caustic soda from one of its sites, with delays of up to 2-3 weeks.  Amid an already long stock position, the source said it was considering turning down its production.

Another derivative player said: “The strike in France is making deliveries tough and the arrival of new raw materials.

“We’ve come up with creative ways of dealing with it…but it’s like the ash clouds: who knows when it will end. It could have a negative impact if it lasts too long.”

Other olefin sources, however, said they were unaffected due to their coastal locations and the ability to send product via ship.

In addition, some products such as benzene remained largely unaffected because they were no reliant on rail deliveries.

Additional reporting by Stephanie Wilson, Amandeep Parmar, Libby George and Madelon Ten Cate
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By: Heidi Finch
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