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IHS Automotive Says Resin Shortage Will Impact Vehicle Production

April 17, 2012

MARL, GERMANY – An explosion and fire at automotive supplier Evonik in Marl, Germany, has resulted in a shortage of a key chemical needed to produce a resin used in automotive components.

Automakers and suppliers with operations in North America scheduled a meeting on April 17 to discuss the impact this event could have on production, according to a new report from IHS Automotive’s analyst Tim Urquhart.

According to Urquhart, supplier Evonik produces a resin, nylon 12, used in brake and fuel lines. His analysis cites AP and a Bloomberg stories that say the explosion on March 31 killed two employees at the plant and halted production of a chemical called CDT, which is a component used to produce nylon 12.

Paul Blanchard from IHS Chemical outlined said the duration of the nylon 12 shortage is difficult to determine at this time. His analysis states that two companies, Evonik and Arkema, provide for half of the global capacity of nylon 12. He said tubing converters in North America have declared force majeure (a contract clause that temporarily releases a party from liability due to uncontrollable circumstances), and that it’s unlikely for Evonik and Arkema to find alternate sources of the chemical component CDT.

Blanchard stated, “In the short term auto and truck production will be affected.”

Individuals speaking on behalf of the automakers, according to IHS, include Mike Goss, from Toyota, who said, “We are currently assessing the situation in North America. Until that assessment is complete, any impact on our production is unknown."

IHS stated that Chrysler’s spokesperson Katie Hepler said the company is "monitoring the situation… At this time we do not anticipate any production impacts." IHS said Honda and Ford made similar comments.

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