22 June 2010 19:43 [Source: ICIS news]
HOUSTON (ICIS news)--US butanediol (BDO) producer BASF will keep sales allocations in place during June and July as a result of a force majeure (FM), but a source with the company would not give details on Tuesday of its supply agreements.
The producer said it would supply its customers based on guidelines in the Uniform Commercial Code, which includes typical historical purchasing.
The move to allocation came after BASF declared FM at its Geismar production plant in Louisiana on 11 June following a power outage, which damaged the catalyst. The plant has a capacity of 135,000 tonnes/year.
The BASF announcement came in tandem with a FM at LyondellBasell's BDO plant in Channelview, Texas, and aggravated the already tight supply environment in the US.
Lyondell set monthly allocations for BDO and derivative tetrahydrofuran (THF) at 40%, based on historical sales. A call to Lyondell seeking comment was not returned.
The source with BASF was nondescript in discussing future pricing based on the FM as well as a timeline on when the company would emerge from the outage and how it would impact inventory levels heading into hurricane season.
The source would also not comment on whether it would supply US customers with material from its European facilities.
BASF did not provide official comment on the FM.
However, a source in Europe said that continental supply was being affected by the movement of European material to the US.
BASF has a production plant in Ludwigshafen, Germany with a nameplate capacity of 190,000 tonnes/year.
Lyondell operates a 125,000 tonne/year BDO facility in Botlek, The Netherlands.
The US-based BASF source said the company was communicating with its customers to make sure supply expectations would be met.
A US buyer had said that tight supply in the wake of double production stoppages had been an ongoing concern.
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