BASF declares force majeure (FM) on PA66 based compounds, according to a letter sent to clients.
The company noted that the reason for the FM was because an “internal sub-supplier” had declared FM.
In addition, BASF noted that it was evaluating “allocation details for existing orders”. But that at this stage it was unable to predict the duration of the FM.
Besides this being yet another blow to an already tight PA66 market, it raises concerns that other PA66 producers could be affected by shortages of intermediate products.
As such, buyers are worried that other PA66 suppliers may soon also declare FM because of lack of raw materials.
In recent weeks, nylon 66 (PA66) supplies tightened further, due to accumulating market disruptions. For example, the US polymer industry is struggling to pick up after the power outages in February.
At the same time, the pandemic is causing shortages of many products, such as glass fibre and flame retardants and other additives.
Since the fourth quarter of 2020 the entire value chain faced disruptions, from base chemicals to additives.
Moreover, demand remained healthy during this period. While this is due to healthy downstream markets, it is also to do with panic buying, as players double-book in a desperate attempt to satisfy demand amid short supply.
Market participants hoped for a better market environment in the second quarter. But developments in April suggest that the situation instead is getting worse, a pattern experienced across the entire polymer industry.