04 December 2012 22:33 [Source: ICIS news]
NEW YORK (ICIS)--Market participants are keeping a close eye on the Mississippi river, which is in danger of closing this month, causing limited availability of feedstock material for phthalic anhydride (PA), sources said on Tuesday.
Low water levels brought on by drought in the midwest caused authorities to announce a possible closure of the river by mid-December. US PA market sources said this would limit availability of feedstock orthoxylene (OX) and is causing concern over PA supply for January.
One producer said it is monitoring the situation closely and will be able to cover their raw material needs. It has the flexibility to use multiple feedstocks, both OX and naphthalene, in the production of its PA.
On 23 November, the US Army Corps of Engineers began reducing outflow from an upper Missouri river reservoir to ease drought conditions in that part of the country. The move further reduced the amount of water flowing into the Mississippi river and could mean further restrictions on barge traffic this month.
Both the American Waterways Operators and Waterways Council have requested immediate assistance from the US Congress and Obama administration to avert economic catastrophe in the midwest from the dangerously low water levels.
In a letter sent on 27 November, they stated that waterborne commerce between St Louis, Missouri, and Cairo, Illinois, will be severely impaired as early as mid-December unless the administration takes emergency action to ensure that the water does not fall below the level needed to support commercial navigation.
PA is a key intermediate in the production of plasticisers, which are used to make products such as flexible polyvinyl chloride (PVC).
Major US PA producers include BASF, Koppers and Stepan.
($1 = €0.77)
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