BASF Force Majeure Extends for December, Uncertainties Rise for European Ethanolamine Market

In the surprising turn of events, the Ethanolamine market in Germany prepared for the potential uptick during December 2023 owing to the supply disruption. A major disruption in the European Ethanolamine market, skyrocketing the prices with BASF's announcement of an extended Force Majeure at its Ludwigshafen plant in Germany acting as the driving force. This critical facility having a capacity of 130,000 metric tons per year, initially went offline under Force Majeure in early November 2023, quoting unexpected circumstances that hampered production. Following that, with the Force Majeure status extended into December, concerns of prolonged supply limitations are gripping the market, pushing Ethanolamine prices to new highs.

November 2023 witnessed a sudden spike in Ethanolamine prices in Germany, owing to the technical glitch at the BASF plant. The impact of this production halt was significant, considering BASF's Ludwigshafen plant is a major supplier of Ethanolamine in Europe. Their Ludwigshafen plant, having a capacity of 130,000 metric tons per year, was unexpectedly hit by a force majeure event in early November. As a ripple effect, traders found it hard to find the resources available to produce Ethanolamine in Germany. To further fuel the current scenario, BASF in Antwerp, Belgium put their feedstock Ethylene Oxide (EO) plant on Maintenance Turnaround from Mid-November to the End of November 2023. While the BASF plant outage played a critical role, rising raw material costs further exacerbated the situation. Ammonia, a key ingredient in Ethanolamine production, saw its price surge in Germany. The combined supply pressure from the Ethanolamine plant as well as the surging raw material prices added another layer of pressure on manufacturers, who were forced to factor the increased cost into their final product pricing.

Now, talking about the current scenario, owning to some technical glitch, the Force Majeure at Ludwigshafen plant in Germany has extended from December 1st till 12th December 2023. As per the reports, the further extension of the plant is expected in the upcoming weeks which may surge the prices of Ethanolamine even more. The immediate consequence of this situation is a sharp rise in Ethanolamine prices. With demand outstripping the limited supply, buyers are facing hefty price premiums to secure the essential chemicals used in various industries including cement, cosmetics, pharmaceuticals, and textile industries, leaving downstream manufacturers to secure alternatives due to production cuts.

As per ChemAnalyst, the extension of the Force Majeure has cast a shadow over the near future of Ethanolamine supply in Europe potentially impacting the cost of downstream products that rely on Ethanolamine in their manufacturing processes.