05 April 2013 16:27 [Source: ICIS news]
LONDON (ICIS)--Availability of hydrochloric acid (HCl) in Europe could tighten in the coming months due to supply limitations in the UK, but any impact will be slight, sources said on Friday.
The European market is balanced as a whole, however, availability in the UK is expected to tighten, owing to the restructuring of the INEOS ChlorVinyls polyvinyl chloride (PVC) Runcorn unit, and this could limit supply slightly in mainland Europe, sources said.
“The market is very balanced in France and in the south of Europe,” a French HCl distributor said. “Demand is improving a little bit, at the beginning of the year it was very sluggish. It seems that as a result of the closure of the Runcorn unit, HCl will tighten in the UK market and there will be more imports [in the UK] from Belgium and the Netherlands."
"It could be a good thing because it might have a domino effect in France if Dutch and Belgian suppliers are sending more volumes to the UK market, so there will less in France potentially,” the distributor added.
Sources said if that happened it could improve demand, and cause prices to rise slightly.
“The UK market already had a little bit of a deficit in supply before this. It is a significant cut in their volumes,” the French distributor added.
A European HCl distributor said that the shortage in the UK could easily be compensated for by exports from the continent. “The market on the continent is more or less balanced, contrary to the UK market which is short. We're supplying trucks to the UK. There is the possibility that the UK situation could have an impact on Benelux, Germany and France and these regions could become tighter.
"We do not know if the shortage is temporary, but it can be filled quite easily with product from the continent,” the distributor added.
“I don't expect a significant impact,” the distributor added. “There is simply a lack of logistic capabilities. Trucks are more expensive than tank containers when it comes to transporting HCl.”
Reduced demand from the steel industry is also likely to lower any potential impact to the supply balance in Europe. The sector is not buying a lot of HCl for the steel pickling process because of a fall in automotive demand.
The source added that there are some producers that can manufacture synthetic HCl. It said that some burners are not running at full capacity, and there is the possibility that manufacturers could increase their output. “If there is any impact, it shouldn't be a big impact,” it added.
A distributor in the UK had previously said: “The INEOS restructuring in March and April will cause a restriction in supply [of HCl]. The outage will cause a 30% reduction in availability in the UK market permanently.”
HCl can either be produced by burning chlorine or as a by-product of various chlor-alkali and fluorocarbon processes and potassium sulphate production.
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