Kostron's Sudden Force Majeure

The electrolytic cathode line of Kostron's Uerdingen factory in Germany suffered major damage on December 6 local time, forcing the plant and downstream manufacturing plants, including MDI and PCS factories, to cease operations. This information was made public to the international market.

 

At present, Covestro cannot accurately predict how long this situation will last and when it will resume production. According to the current assessment of Covestro, it is estimated that the failure of the affected electrolysis production line can only be repaired to a small extent. Therefore, the delivery of relevant products will be greatly insufficient.

 

In addition, Covestro also indicated that under the best circumstances, the chlorine plant would be completely restarted before December 31, 2022. The company will timely inform the customer of the latest situation about the evaluation, especially the date of restart.

 

• As a result of this event, Covestro announced that force majeure would affect the following products:

 

-Chlorine

 

-Sodium hydroxide solution

 

-Hydrochloric acid

 

-Hydrogen

 

-Polycarbonate products

 

-Some MDI products

 

Covestro also said that it would inform customers of the latest accident development, as well as any measures taken by the company to prevent or reduce interference and losses to customers.

 

• It is worth mentioning that Covestro has had many force majeure events this year.

 

In the middle of August, Kostron's 300000 t/a TDI unit in Germany suffered force majeure due to chlorine leakage.

 

On March 31, force majeure occurred in the supply of polycarbonate (PC) in Covestro's factory in Baytown, Texas, USA.

 

On February 8, due to unforeseen emergencies in the hydrochloric acid logistics in Leverkusen, the production of Covestro HDI and IPDI was affected, and the force majeure on the supply of HDI and IPDI was immediately announced.

 

Among the above products affected by force majeure, one of Covestro's products has the world's largest production capacity, that is, polycarbonate, or PC.

 

Polycarbonate (PC) is a thermoplastic engineering plastic with excellent comprehensive performance. As the fastest growing consumption material among the five general engineering plastics, polycarbonate has good mechanical properties, optical properties, thermal properties and flame retardancy, and is widely used in automobile parts, consumer electronics, electrical engineering, household appliances, light emitting diodes (LEDs), building panels, durable consumer goods, optical lenses Optical disc substrate, special protection and medical devices and many other fields.

 

By the end of 2022, the global polycarbonate production capacity has exceeded 7.5 million tons/year, and the production units are mainly distributed in Northeast Asia, Western Europe and North America. In 2022, the total polycarbonate production capacity of the three regions mentioned above will be close to 90% of the total global production capacity. Among them, the polycarbonate production capacity in Northeast Asia is the most concentrated, mainly distributed in Chinese Mainland, South Korea, Japan and Taiwan, China. In addition, in terms of the new capacity of global polycarbonate in recent years, they are all concentrated in Northeast Asia, and the growth is mainly in China.

 

In the production of polycarbonate, the global supply is in an oligopoly pattern. Among them, Covestro ranks first in the world with a production capacity of more than 1.6 million tons/year; Shabik ranks the second in the world with the capacity of nearly 1.5 million tons/year; The third largest producer is China's Zhejiang Petrochemical. On the whole, the total capacity of the top three PC manufacturers is close to half of the total global capacity.

 

In recent years, China's polycarbonate industry has developed at a high speed, with the capacity increasing from nearly 1.2 million tons/year in 2018 to nearly 3.2 million tons/year in 2022, with a compound annual growth rate of nearly 28%; The output will increase from nearly 750000 tons in 2018 to nearly 1.7 million tons in 2022, with a compound annual growth rate of nearly 25%. In general, the growth rate of polycarbonate production in China is lower than that of production capacity, which also makes the operating rate of the industry tend to decline.

 

With the continuous improvement of industrialization level, products such as electronic appliances and automobiles will play an increasingly important role in our production and life. In the future, there will be more and more demand for polycarbonate in the market. However, according to the current supply situation in China, the industry is already in a state of overcapacity. How will the development of polycarbonate industry evolve in the next few years? Are there any new products worth paying attention to? Beijing Sinochem New Materials Technology Institute (ACMI) is now launching the 2022 Polycarbonate (PC) Insight Report, which will give you answers.