BASF hikes prices on intermediates, hydrosulfites

By Pete Mansell

- Last updated on GMT

Related tags Basf Acetic acid

German chemicals giant BASF has announced its latest brace of price
rises, this time for two forms of carboxylic acid and for bleaching
and reducing agents.

Effective immediately or as soon as existing contracts allow, the prices of 2-ethylhexanoic acid (2-EHA) and propionic acid will rise in Europe by €40 per metric ton.

BASF said the main reasons were increased costs for raw materials, energy and logistics.

2-EHA is not used in the production of pharmaceuticals but propionic acid is, as a building block.

It also serves as an intermediate for vitamin E, crop protection agents, solvents, food preservatives and plastics.

The main application is in preserving feedgrain, where propionic acid is claimed to offer both economic and ecological benefits.

BASF produces 110,000 tons of propionic acid a year and plans to boost capacity to 149,000 tons a year by mid-2009, when the expansion of facilities in Ludwigshafen, Germany (adding capacity of around 30,000 metric tons per annum) and Nanjing, China (+9,000 tons per annum) is completed.

BASF says it is one of the world's leading suppliers of 2-EHA, a chemical intermediate manufactured at the group's Verbund site in Ludwigshafen.

2-EHA is used in a number of industrial applications, including the manufacture of plasticisers, PVC stabilisers, lubricants and drying additives for coatings.

BASF produces 25,000 tons of the intermediate a year.

Selling prices for hydrosulfites will increase by at least €120 per metric ton, or equivalents in local currencies, with effect from 1 March.

As with the intermediates, no percentage increases were available.

BASF explained that customer-specific prices were charged for hydrosulfites.

The price adjustment was due to rising prices for key raw materials such as sulphur, natural gas and caustic soda as well as " persistently high " energy and transportation costs, the company noted.

Hydrosulfites are powerful bleaching and reducing agents, used mainly in the paper, textile, kaolin, chemical, pharmaceutical and food industries.

At BASF they fall into the inorganics segment of the company's chemicals division.

In pharmaceuticals, hydrosulfites serve as a reducing agent in drug production, although this application is a " very, very small " part of the business and the main use is in textiles, BASF told

The company has introduced a number of price hikes for pharmaceutical and chemical intermediates, excipients and other products over the past couple of years.

Last November, prices across its range of pharmaceutical excipients rose by as much as nine per cent, a move preceded by, among others, price increases on methylamines and derivatives, polymer dispersions and powders in October, and successive hikes for ethanolamines in June and September 2007 respectively.

Before that, BASF lifted the prices of intermediates used in the manufacture of penicillin in November 2006, again citing raw material costs cutting into its margins.

Announcing its fourth-quarter results earlier this month, BASF said it had only been able to pass on some of the " significantly higher " raw material costs in its intermediates business to customers through higher selling prices, although improved volume had more than compensated.

Sales of intermediates grew by 8.7 per cent in both the quarter and the whole of 2007.

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