Germany's Quinn Chemicals decommissions construction of Leuna plant

21 March 2013 11:04  [Source: ICIS news]

LONDON (ICIS)--Europe's methyl methacrylate (MMA) players on Thursday are absorbing the news announced this week that Quinn Chemicals will decommission the construction of its MMA plant in Leuna, Germany.

“This is the end of a story that started in 2006,” one market player said.

In a company press statement released on 18 March, Quinn Chemicals said: “The regional authorities have been informed that, having exhausted all options, the difficult decision has now been taken to decommission the Leuna plant.

Initially, the 100,000 tonne/year plant in Leuna was to be the first in Europe based on tertiary butyl alcohol (TBA) technology.

One buyer said it was a shame the plant had now been decommissioned as it had been looking forward to having an additional supplier in the market.

“That's a shame,” it said. “I think it's a pity because there are not many players in Europe. I was really excited when they announced their plan because it would have put more material on the market. For the others [suppliers] it's good news, of course.”

Construction of the plant began in 2006. As a result of the global financial crisis in 2008 and 2009, as well as the financial difficulties of the group at that time, construction work was suspended in 2009, the statement said.

“Following the financial restructuring of the Quinn Group in December 2011, a decision was made in 2012 to proceed with the construction provided a suitable alliance partner could be found.”

The company added a thorough and exhaustive global tender process failed to identify a suitable partner to form an alliance for the completion of the project.

One buyer said: “As a matter of fact, this announcement isn't any surprise for us - it's been delayed for years and we have thought for a while that it would be decommissioned.”

A producer said it would not affect the market short term. “What it shows, as they state clearly, is that they were looking for a partner but they didn’t find anybody. The fact that they didn’t find anybody is yet another element to show that as it is today the job of making MMA in Europe is not profitable. The revenues achievable are not sufficient to justify the investment.

"It is further proof that the [MMA] producers in Europe are not in a good position these days because nobody can justify building a new capacity even though it is half paid. It was too much risk for a potential partner,” the producer added.

MMA producers are targeting triple-digit hikes in April and second-quarter contracts because of high feedstock costs, tightening supply, a pick-up in demand and also as they seek to regain margin.

It is estimated that over €191m ($248m) had been spent on the project, the company said in the statement.

($1 = €0.77)

By: Helena Strathearn
+44 208 652 3214

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