17 April 2012 21:56 [Source: ICIS news]
HOUSTON (ICIS)--Supplies of the flame retardant hexabromocyclododecane (HBCD) are becoming tighter, which could result in a push for higher prices for modified expandable polystyrene (EPS), sources said on Tuesday.
HBCD supplies have been tight, and costs have been high all year. But a 31 March fire at Evonik's Marl, Germany, chemical park, is expected to cause even more tightness in the market, EPS suppliers said.
The fire, which resulted in the death of two workers, occurred at a plant making cyclododecatriene (CDT), which is used in the production of HBCD, the suppliers said.
So far, North American producers say they have been able to obtain the material they need to produce modified EPS, but depending on how long the outage at Evonik lasts, that situation could change.
"The bottom line is right now, we can supply our customers," a producer said. "But we are tracking this issue ... and obviously there is the potential for prices to go up if HBCD goes up."
Another producer echoed those concerns.
"Flame retardant is definitely short," the producer said. "We are trying to secure volumes, but this will just add pressure on price."In January, US suppliers began implementing a 2 cent/lb premium for modified EPS, which contains the flame retardant.
The higher price has caused some consumers to switch from modified to non-modified EPS, which does not contain the flame retardant, sources said.
Major North American EPS producers are BASF, NOVA Chemicals, Flint Hills Resources, Styrochem, Nexkemia, Idesa and Polioles.
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