An explosion at a German chemical factory late last month could disrupt production at a number of the world’s largest automotive manufacturers as supplies of a scarce resin dry up.
In a letter to customers revealed by Bloomberg, TI Automotive chairman William Kozyra said the shortage of a chemical produced by Evonik Industries AG in Marl, Germany, could lead to vehicle production disruptions "in the next few weeks".
"The shortage is real and immediate," Kozyra said in the letter. "The possibility of production interruptions at some of your facilities in the next few weeks is high."
The explosion at Evonik’s factory on March 31 killed two workers and led to a complete loss of production of cyclododecatriene (CDT), a chemical that is in short supply globally and a key component of a resin known as PA-12. The resin is used in brake- and fuel-line coatings, quick connectors and flexible hoses, among other products.
TI Automotive claims to be a "valued supplier partner of all the world’s major automakers" on its website, distributing components to General Motors, Volkswagen, Toyota, Ford and most other global brands.
The impact of the CDT shortage on manufacturers is not known as this stage. All are currently monitoring the situation closely.
Industry analysts told Bloomberg there was no easy substitute for Evonik’s CDT for the industry in the short term, with few other chemical companies in a position to take over its production and supply.