BASF Announces Production Delays for Key Vitamins Following Ludwigshafen Explosion

On August 7, BASF, a leading German chemical company, announced a force majeure on the distribution of specific vitamin A, vitamin E, carotenoid products, and certain aroma ingredients. This decision follows an explosion and subsequent fire at its Ludwigshafen plant in late July, which damaged the facility that manufactures these compounds and their precursors. Production at the site has been suspended, and repair work is ongoing. BASF believes that an organic solvent leak on July 29 may have caused the explosion, though the precise cause is still under investigation.

In its most recent update, BASF provided an estimated timeline for resuming production at its Ludwigshafen plant. The company projects that aroma ingredients will be the first to come back online, with some products potentially available by October 2024, and the remaining items expected by the end of November 2024. However, the restart of production for vitamin A, vitamin E, and carotenoid products is anticipated to occur no sooner than January 2025.

BASF emphasized that these timelines are provisional, as the full scope of the damage is still under evaluation and repair work is ongoing. The company also warned that even after production resumes, it will take several months to replenish global, regional, and local inventories to normal levels, delaying a full return to "business as usual."

The Vitamin E and A markets have been highly volatile since the incident. Ongoing maintenance shutdowns at several production facilities have restricted the ability to swiftly boost output. As a result, the scarcity of these essential ingredients is likely to drive up costs for both buyers and manufacturers, thereby impacting the overall pricing dynamics in the vitamins market.

This situation echoes a similar event from October 2017, when a fire at BASF's northern Citral facilities in Ludwigshafen led to a plant shutdown and a force majeure declaration for Citral and Isoprenol-based aroma products. At that time, combined with supply issues in China, the prices of vitamin A and E surged dramatically.

ChemAnalyst forecasts a supply tightness for Vitamins A and E during Q4 2024 and Q1 2025, with elevated prices anticipated to persist into 2025.

The limited availability of these essential vitamins presents serious challenges for the industry. Vitamins play a critical role in animal nutrition, affecting health, growth, feed quality, and overall profitability. Lowering vitamin levels or relying on unverified substitutes can drive up production costs without significantly reducing feed expenses, thereby jeopardizing business profitability. Although the current disruption mainly affects Vitamins A and E, it underscores the broader risks associated with sudden supply chain interruptions. The scarcity of these vitamins not only results in higher prices but also adversely impacts animal protein production and animal welfare.