Global Auto Output Restricted by German Resin Plant Explosion image

The explosion which took place on March 31st at a German manufacturing plant might cause a plastic resin shortage that could disrupt U.S. auto production.

The component is called CDT, found in a nylon resin called PA-12 or Nylon-12, which is used to make a specialized plastic for auto fuel lines and brake lines, solar cells, pipelines, sporting goods and household items.

“The shortage is real and immediate,” TI Automotive Ltd. Chairman and CEO William Kozyra wrote in a memo to customers last week. “The possibility of production interruptions at some of your facilities in the next few weeks is high.”

GM already confirmed that some of its suppliers have been affected by the disruption and other automakers were assessing the situation, but until the assessment is complete they don’t know if there will be an impact on production. Industry has already been trying to find a replacement for the resin, but the disaster showed the auto industry’s dependence on this seemingly minor component.

Evonik and Arkema, one of its customers, whose PA-12 production already has been disrupted, account for about half of worldwide manufacturing capacity for the resin. It is believed that Evonik would get back on track in about 6 months, period in which auto industry will scramble to find substitute parts for a resin that was already in short supply.

“The ability of Evonik and Arkema to find alternate sources of CDT is very limited, and it is doubtful that the CDT shortage can be made up,” IHS Chemical analyst Paul Blanchard said. “In the short term, auto and truck production will be affected.”

PA-12 was already in short supply due to the solar industry increasing demand. Finding another chemical in such a short time is impossible since it needs to be thoroughly tested.

“We have implemented a global work team, comprised of GM purchasing, engineering and suppliers, including Evonik, and are working to allocate and prioritize existing inventories and also find alternative process material solutions,” Tier One spokeswoman Kelly Cusinato said.