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APP prices set to soar

By David Reed, UT EditorLondon-“Double-digit price rises” are predicted for aromatic polyester polyols (APP) as a key raw material supplier declares force majeure, putting customers on allocation.Shell Chemical Co.’s 900-kilotonnes-per-annum (ktpa) ethylene cracker in Moerdijk, the Netherlands, went down 19 Jan, leading to the firm declaring force majeure to customers using its ethylene, propylene, ethylene oxide and ethylene glycol grades, including diethylene glycol (DEG). DEG is a key component in the manufacture of APPs, and the Shell problem exacerbated an already tight supply situation.As a result of the shortage, and concomitant price rises for DEG, Stepan Europe is to announce “significant” price increases for its Stepanpol materials, from 1 April.”DEG was already tight worldwide,” explained Roger Stubbs, Stepan’s business manager European polymers, in a 10 Feb telephone interview, “the Asian market is pulling in DEG and MEG (monoethylene glycol), so supply in Europe is very tight.”[We are] struggling to meet orders, we’re scraping by, day by day,” admitted Stubbs.”This is very significant,” he continued, “more significant than early last year.” This was when prices were rising in anticipation of oil price rises as the Iraq war was about to start, Stubbs explained.The problem comes at a particularly bad time, from Stepan’s point of view, the business manager indicated. Following start-up of its 30-ktpa APP plant in Wesseling, Germany, in July last year, “[our APP] business was growing rapidly [in Europe],” he said. But, “[we] can bring in material from our plant in the US, it is more of a European situation at present,” Stubbs said.In any case, “it will affect all polyester makers, even those making compositions for shoe soles,” he concluded.Shell indicated 12 Feb that, although the cracker is now up and running, force majeure remains in effect for DEG, with contract customers still on allocation; the force majeure on ethylene, propylene, ethylene oxide and ethylene glycol grades – mono- and tri-ethylene glycol (MEG and TEG) – has been lifted, however, and the plants are operating satisfactorily, Shell added .”

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