Thomas Fritsch (Foundry-Planet Ltd.) (FP):
As we hear, there are currently bottlenecks in foundry raw materials, such as FA and MDI. What are the reasons for this and what is the impact of the shortage?
Brotzki: The implementation of more stringent environmental regulations for Chinese FA producers has led to the closure of production plants in China and the imposing of an export ban. China has the largest capacities for FA production worldwide. Other producers were unable to offset the resulting loss of volume in the market, and this has triggered a worldwide shortage and the fixing of quotas for the volume available. This limited availability has caused and continues to cause a sharp increase in FA prices.
As far as MDI is concerned, all we can say is that key manufacturers refer to technical problems in production as severely limiting the availability of MDI.
(FP): Do you believe the shortage and associated price rise is just for the time being? Or do customers have to adjust to higher prices in the medium term?
Brotzki: Of course, we are hoping for an improvement of the supply situation shortly. But at this juncture it would be pure speculation to make any statements about how long the current shortage of the materials concerned will last. Thanks to our supplier strategy, ASK Chemicals GmbH is in a position to continue to supply its customers, albeit at higher prices for the time being, but in our usual high quality and with our accustomed reliability.
(FP): Are there any alternative sources of supply or other possibilities in order to detract from this dependency?
Brotzki: As a global company group, we have a worldwide sourcing network for our raw materials. Unfortunately, however, this does not alter the fact of the global shortage for the raw materials mentioned and the current daily price increases. The ASK Chemicals Group will endeavor, in spite of the present supply situation, not to make any concessions when it comes to the quality of raw materials. In the interests of our customers, we exclusively purchase our raw materials from quality-approved suppliers.
MDI is an important part of part-2 formulations. We would also like to be able to offer our customers ways and means to escape this dependency. Unfortunately, however, we see no alternative solutions at present which could be quickly implemented in operations, easing the strain on them.
The situation with FA is fortunately different. Technically, it is possible without any problem to shift from pure furan resins to furan phenol resins. The process is unchanged and customers can thus avoid at least part of their dependency and slightly cut their raw material costs. A path that was already successfully trod several times in the past.