Europe HCl market balanced despite UK tightness

10 May 2013 10:40  [Source: ICIS news]

By Helena Strathearn

LONDON (ICIS)--Supply in the UK hydrochloric acid (HCl) market is tight, owing to the restructuring of the INEOS ChlorVinyls polyvinyl chloride (PVC) Runcorn unit, but supply in Europe remains largely balanced, sources said on Friday.

“It is not surprising,” one source said. “They [in the UK] have a 30% reduction in availability, but Europe is balanced as a whole.”

Market participants had expected the restructuring of the Runcorn unit, in Cheshire in England, to tighten HCl supply in the UK and there had been concerns that supply in Europe would also be restricted, but so far supply and demand in Europe are balanced.

The UK HCl sector is importing material, mainly from Belgium and Germany, to compensate for the reduced volumes.

A buyer in the UK said: “It's tight and we've been put on 70% allocation. We are now massively overpaying suppliers on the continent.” The buyer said it was paying about 20% more for imported volumes. “Demand is stable, but it's the supply that's dropped.”

One UK-based HCl distributor said availability has improved compared with the tightness seen in recent weeks, but reiterated the market remains tight. The source added there had been some logistical problems in the delivery of imports.

“It’s definitely improved a lot since this time last month,” it said. “It's improved, but it's still tight.”

It added that production at the Runcorn unit has been partially restored, but this was not confirmed at source.

While Europe is largely balanced, availability in France is balanced to tight, one HCl producer said. “In France, it's balanced to tight because the plant which is generating HCl in Le-Pont-de-Claix is down for maintenance until the end of the month.”

“Even though we built strong inventories, it is still difficult for our customers,” the producer said. “We have just enough for contracts, so we are not selling on the spot market.

"There were also some technical problems at another producer at the end of April and the beginning of May in France, so this has added to the tightness in the French market. On top of that there are some holidays in France which has brought in some difficulties for logistics. All in all the market is pretty tight,” it explained.

It added that while it seems the UK market has succeeded in importing material from Belgium and the Netherlands, transport availability is limited. “There is a big bottleneck on availability of trucks because HCl requires special rubber-lined equipment. Once you need to import a significant volume, you need to find the trucks.”

Vencorex began planned maintenance on its toluene di-isocyanate (TDI) plant in France on 21 April.

HCl is a by-product of PVC and TDI production.

By: Helena Strathearn
+44 208 652 3214

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