An explosion and ensuing fire happened at the BASF facility in Ludwigshafen, Germany, on July 29, 2024. An explosion and subsequent fire were caused by an organic solvent leak. The plant was shut down right away, and it is safe as of right now. After carrying out extensive inspections, BASF's environmental monitoring units were able to confirm that the incident had not contaminated any air, water, or soil.

As a precaution, the affected section of the BASF Ludwigshafen site has been shut down. This closure is anticipated to lead to a reduction in the production of various goods from this area, which is known for manufacturing basic and specialized chemicals, vitamins, and consumer products. Consequently, this decreased output may cause supply issues for markets dependent on these goods.

The incident could also have significant repercussions for the global feed markets, potentially disrupting the supply of vitamins A and E. The affected area of the plant is crucial for producing precursors used in the synthesis of carotenoids and vitamins.

As of August 5, access to certain sections of the BASF plant has been partially restored. Firefighting water, which requires special handling, has been removed and transferred to designated containers, and a detailed assessment of the affected areas is ongoing.

Regarding production, BASF has indicated that delays or disruptions might affect products in the vitamin E and vitamin A value chain, as well as related carotenoids. However, production of core aroma ingredients, including Citral, Citronellol, Linalool, Geraniol, Lysmeral, and their derivatives, is continuing. Some selected aroma ingredient products may still experience delays or disruptions.

This incident brings to mind a similar event from October 2017, when a fire at BASF's northern Citral facilities in Ludwigshafen caused a plant shutdown and led to a force majeure declaration for Citral and Isoprenol-based aroma products. That shutdown, coupled with concurrent supply disruptions in China, resulted in a sharp increase in the prices of vitamins A and E, driving market innovation for alternative feed sources.

Currently, consumers are growing increasingly concerned, with market uncertainty surrounding the potential escalation of this incident similar to the 2017 fire. At present, suppliers are awaiting further updates from BASF and have refrained from making market offers.

According to ChemAnalyst's analysis, the situation for vitamin A, E, and carotenoids remains highly fluid, with price discovery hindered by low market liquidity as key players adopt a cautious stance. Few suppliers are actively offering products, and opportunistic spot offers for smaller quantities of vitamin E and vitamin A could see prices rise by approximately 30-60% compared to July levels, or potentially even higher.