BASF Announced Force Majeure on Polyamide 6 and Caprolactam at its US Facility in Freeport, Texas
- 30-Jan-2023 3:48 PM
- Journalist: Patricia Jose Perez
In the latest event, the well-known German chemical giant BASF announced a Force majeure on 24.01. 2023 for the production of Polyamide 6 and Caprolactam at its US facility in Freeport, Texas. The US market never expects this kind of force majeure in the country. The force majeure might lead to the price increase of Polyamide6 and Caprolactam and a supply shortage in the domestic market.
The severe winter weather and icy temperatures in Texas impacted the Freeport operations. The relatively mild winter conditions in the US appear to be causing difficulties in supplying raw materials to the domestic market.
Companies continued to emphasize the impact of high inflation on client spending and sluggish customer demand. In parallel, the private sector's new orders decreased in January for the fourth month in a row.
Inflation, interest rates, and customer hesitancy remained cited as major market factors contributing to the downturn. The manufacturers saw a sharp decline in new orders from the end-use industries.
Polyamide 6 and Caprolactam prices are stable in the country due to the declining price trend in feedstock Cyclohexanone prices for the past few months in the domestic market and weak demand. Furthermore, the automotive and textile industries remained weak, and downstream Caprolactam derivative Polyamide 6 remained stable in the US market.
Business activity contracted sharply again in January 2023, indicating that the US economy has started 2023 on a weak note. This is due to lower activity in both the manufacturing and service sectors.
As per ChemAnalyst, the cost of Polyamide 6 and Caprolactam hovered around USD 3520/MT on a DEL US Gulf and USD 2470/MT on a FOB Texas basis during the week ending 27th January 2023.
According to experts, the cost of Polyamide 6 and Caprolactam products might incline in the US market owing to the unexpected announcement of the force majeure. The shortage in supply and insufficient product availability may raise the price of Polyamide 6 and Caprolactam in the US region.