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Home | News |BASF Declares Force Majeure on Acrylate Esters at Ludwigshafen on Low Rhine Levels
BASF Declares Force Majeure on Acrylate Esters at Ludwigshafen on Low Rhine Levels
Updated: 2018-10-22 12:41 Source: icis share:

BASF has declared force majeure on acrylate esters production at its Ludwigshafen, Germany, facility because of critically low water levels on the River Rhine, the producer said in a letter to customers seen by ICIS on 18 October.

Force majeure has been declared on butyl-acrylate (butyl-A), 2-ethylhexyl acrylate (2-EHA) and ethyl-acrylate (ethyl-A).

"Our production sites in Ludwigshafen are currently encountering significant constraints regarding the raw material supply via barge due to very low water level of the river Rhine, resulting from the unusually long warm and dry weather conditions in Germany," the producer said in the letter seen by ICIS.

Water levels on the Rhine have hit the lowest mark on record and are likely to continue retracting, according to a spokesperson for the Rhine Shipping Authority (WSA) on Thursday.

At 9:30pm on Wednesday, the water level at key gauging station Kaub dropped below 35cm, the previous lowest point set in September 2003, according to WSA's Florian Krekel.

As of 7:00am on Thursday, the water level is at 32cm and is likely to continue decreasing, he added.

BASF uses the River Rhine to move feedstock for acrylate production, with it also experiencing issues recently linked to contamination in its butyl-A supply.

Supply in the acrylatea market is balanced, with some price decreases this week on butyl-A linked to softening demand.

Traders have received higher requests in recent days on the back of BASF's production constraints, but many sellers feel there is enough additional supply in the market to meet these.

There is ongoing turnarounds in the region, with stoppages for Arkema, Synothomer and Sasol in the fourth quarter.

Despite some issues with feedstocks during the preparations for the outages, producers have in general planned well for the stoppages and built inventory.

The lower demand is largely masking any constraints in the market, with coatings demand deflating seasonally as the year continues.

The concerns over the economy and geopolitical landscape has also resulted in hesitance in the market, with the coatings season in 2018 described as disappointment by many sources.

Industry destocking will also become an increasing factor going into November, as players look to manage working capital ahead of year-end.

This lower demand dynamic may help to balance the supply in Europe, with it currently unclear how long the issues on the Rhine will continue.

The lower water levels are also impacting other logistics in Europe, increasing the demand for trucks, which are already under pressure because of the limited truck drivers in the region.

Acrylate esters include methyl-A, ethyl-A, butyl-A and 2-EHA, and are used to make paints, coatings, textiles and adhesives.


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