Impact of forces Majeure of m-cresol Lanxess on Vitamin E Production: 01-12-2020

M-cresol an important fine chemical, used in the production of vitamin E, fenitrothion, permethrin and many other chemicals that are then further utilized in other industries such as medicine, pesticide, antioxygen, dye, perfume and fungicide. This chemical is widely utilized by the vitamin industry in China and is considered an important intermediate in the manufacturing process of vitamin E specifically. Earlier this year, the Ministry of Commerce of China announced the anti-dumping investigation on imports of m-cresol from the USA, EU, and Japan. Furthermore, another disruption in the supply of m-cresol was reported on November 18, 2019, when Lanxess, a specialty chemical company and one of the world’s largest m-cresol producer announced force majeure due to “unforeseeable technical problems”.


 According to Lanxess, the regular production levels of m-cresol are expected to resume during the first half of 2020. However, until than the supply of m-cresol in China is expected to be restricted and this might cause an increase in the production cost of vitamin E. Although, there are many local m-cresol manufacturers operating in the country but there supply often doesn’t meet the demands of the market and therefore, the chemical has to be imported.


One of the leading manufacturers of synthetic vitamin E, BASF announced that the current scenario of m-cresol will not impact the production of vitamin E, as their company does not use m-cresol as intermediate. However, there are many local Chinese vitamin E manufacturers whose main raw material is m-cresol and with the current scenario of anti-dumping investigation and force majeure declaration from one of the largest suppliers, the production process of vitamin E will be disrupted. All these developments are occurring at a time when one of the major vitamin E production operation jointly operated by DSM and Nenter is currently offline for up-gradation and refurbishment of facilities. All these disruptions will restrict the supply of vitamin E in the Chinese as well as the global market and will push the price up.


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