Europe would be affected first by the resin shortage, before North America

Article by Christian Andrei, on April 24, 2012

If alternative resins used to make fuel systems and brake lines can’t be found right away, the auto production in Europe would be affected first before the North American automakers would be disrupted, according to a Credit Suisse Group report. Chris Ceraso, a New York-based analyst for Credit Suisse, stated last Friday in the report that it’s likely that North American automakers would carry an extra one month of supply of the resin PA-12 compared to its European rivals. He said that global capacity to make PA-12, also named Nylon-12, may have been reduced by up to half after the March 31 explosion at German chemical maker Evonik Industries.

He said that it’s probable that the industrial customers have thinner inventories and won’t have large amounts of materials in transit. Automakers, including General Motors Co., Volkswagen Group, Toyota Motor Corp. and Ford Motor Co. and their suppliers, are examining ways to find and test alternative materials and prevent the loss of vehicle output.

Credit Suisse estimates that a combined two to three months of resin inventory may still be "in circulation." Evonik's plant in Marl, Germany, manufactured a base material required in Nylon-12 called Cyclododecatriene or CDT. Evonik is the supplier to France's Arkema and these companies are two of just four global sources of Nylon-12. Switzerland's Ems-Chemie Holding and Japan's Ube Industries are the two other producers. [source: freep]

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