Hydrochloric Acid Alert
For the last month, Doe & Ingalls has been closely monitoring conditions in the tightening Hydrochloric Acid (HCl) market. Market tightening has been driven by shortages in the technical grade HCl market. While our life science and advanced technology customers use a higher purity HCl produced by a different process, supply shortages in technical grade HCl have come to the point of impacting the higher purity material. Though it is difficult to estimate the severity of the shortage, it has been estimated that supplies are 35-40% below average and the shortage will likely last well into 2012.
Technical Grade HCl is mainly a co-product of polymer production. Because of the current economic conditions, overall polymer production is down, reducing the available HCl. At the same time, demand for HCl by its largest users in Steel, Food, Oil and Gas has remained relatively steady.
On November 8th, Doe & Ingalls released a MOR™ (Management of Risk) notification to its MOR™ program participants who purchase hydrochloric acid and began implementing risk mitigation steps. On November 14th, Rx360 confirmed the market situation and issued an alert to its members. As more information becomes available, we will contact our HCl customers first and then post information on this blog.
Find out more about the MOR™ program or how to participate.
Comments
The HCl shortage is not an issue for Detrex Chemicals. We manufacture HCl on purpose by burning hydrogen in chlorine producing anhydrous hydrogen chlorine which then is absorbed into ultra pure de-ionized water to make the liquid form and not as a waste or by product stream. In fact, we have stepped up production to help supply additional HCl to D&I customers in need and as a result of the shortage in the market place for HCl.
To get more information about Detrex HCl, contact me at TDinka@DoeIngalls.com or your account manager.
Bloomberg published that Fracking is expected to grow 19% worldwide in 2012.
http://www.bloomberg.com/news/2012-01-19/frack-market-to-grow-19-in-2012...
This is important to the specialty chemicals market because the Fracking industry is a major user of key chemicals (like HCl) used in our market. Tech-grade HCl, the grade used by the Fracking industry, is primarily manufactured as a co-product of polymer manufacturing. The good news is that we are starting to see production on polymers increase, thus encouraging more polymer production and the co-product, tech-grade HCl. It is uncertain whether polymer production will keep up with the HCl demand in the fracking market.
For a list of chemicals used in fracking, see Doe & Ingalls link:
http://www.doeingalls.com/fracking-and-its-impact-on-the-specialty-chemi...
BASF has begun a turn around at their Louisianna plant that will last to about Mid-March. This plant produces 160,000 tons each of TDI and tech grade HCl that is used by the Oil&Gas market, which is expected to grow 19% this year. Currently, the price of tech grade HCl is double of what it was a year ago. For more information on the Fracking market, go to http://www.doeingalls.com/fracking-and-its-impact-on-the-specialty-chemi...