Global automotive industry faces a severe resin shortage

Article by Andrew Christian, on April 16, 2012

TI Automotive Ltd. said that fuel shortage can’t be avoided, especially since there would be a “severe” shortage of a resin within the next few weeks. This would have a heavy impact on the global automotive industry since resin is required for making fuel and brake parts. TI Automotive Ltd chairman William Kozyra said that it’s very likely that there will be production disruptions at several facilities within the next few weeks. Kozyra wrote that the shortage is the result of a blast on March 31 at a plant of chemical maker Evonik Industries AG in the city of Marl in Germany's Ruhr valley.

This is leading to a shortage of a resin called PA-12. Two deaths are related to this explosion, resulting in a “complete loss" of manufacturing Cyclododecatriene (called CDT) and a key element of PA-12. In the letter, Kozyra said that the global capacity of CDT is "very limited.” Resin is a necessary ingredient in using fuel and brake-line coatings, flexible hoses and quick connectors supplied to automakers.

TI Automotive supplies brake and fuel lines, as well as fuel tanks and pumps to all major automakers, such as General Motors Co., Ford Motor Co., Toyota Motor Corp. and Volkswagen AG. Evonik makes its own CDT and is a "key" supplier of the material to other manufacturers of PA-12. Toyota spokesman said that Toyota is “aware” of the situation. Chrysler Group LLC is "monitoring the situation with our supply base," spokeswoman Katie Hepler said in an e-mail. "At this time we do not anticipate any production impacts." [source: Bloomberg]

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