November 2, 2017 / 10:56 AM / a month ago

BASF declares force majeure for certain aroma ingredients

FRANKFURT (Reuters) - German chemicals group BASF declared force majeure for certain citral and isoprenol-based aroma ingredients after a fire forced it to shut down a production facility at its Ludwigshafen headquarters.

BASF declared force majeure - which suspends a company’s contractual obligations in the wake of disasters that lie beyond its control - on Wednesday and repairs would take several weeks, a spokesman said on Thursday.

Patrick Lambert at brokerage Raymond James said in a research note that DSM, which competes with BASF in vitamins, might benefit because citral is both a fragrance and one of the building blocks for vitamins A and E.

While BASF has not declared force majeure on vitamins, vitamin production could also be at risk depending on the length of the outage, he said, adding “if this occurs, this would benefit DSM in global pricing dynamic due to tighter supply conditions”.

Reporting by Patricia Weiss and Ludwig Burger; Editing by Christoph Steitz

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