24 June 2011 10:39 [Source: ICIS news]
LONDON (ICIS)--The hydrochloric acid (HCl) market in southern Germany has tightened because of the shutdown of Wacker Chemie's Kempten site and the logistical problems caused by low water levels on the river Rhine, market sources said on Friday.
The shutdown of Wacker Chemie’s pyrogenic silica unit, in southern Germany, has translated into a net loss of 10,000–15,000 tonnes/year of HCl, a supplier said.
The Munich-based chemical company, which produces HCl as a by-product of pyrogenic silica, permanently shut its Kempten site on 1 June.
Production has been transferred to industrial-scale plants in Burghausen, in the district of Oberbayern, and Nunchritz, in the district of Meissen, to optimise capacity utilisation at these high-volume facilities.
In Germany, production outages have traditionally been largely offset by the flexible capacity of suppliers and the large storage facilities of traders.
However, the low water levels on the river Rhine continue to restrict supply in the south and cause upward pressure on freight costs.
TIB Chemicals, a Munich-based distributor, is currently transporting HCl from northern producers to its storage site in Mannheim, southern Germany, via the Rhine. From Mannheim, the product is then distributed to customers.
Under normal circumstances, the extra capacity of north European producers would offset the shortage caused by Wacker Chemie’s shutdown, said the distributor.
However, according to a northern producer, barges have been unable to take more than 500–600 tonnes, which is only half of the usual load.
Heavy rain over the past few days has improved water levels, but dry weather and high temperatures have been forecast for next week.
The dry season has only just started, so it is unclear whether the situation is likely to return to normal in the near future, the producer said.
According to one supplier, market tightness and increasing freight costs have already led to small increases in spot business, with less and less business being done in the low end of the range, which is set at €70–85/tonne ($99–121/tonne) FD Germany.
Contract prices are also expected to increase in the third quarter, it added.
($1 = €0.70)
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