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Dupont, Dow to help global automakers avoid output crunch

April 23/2012

(Reuters) - Dupont (DD.N) and Dow Chemical (DOW.N) are among chemical firms working with global automakers who are bracing for a crunch in production, after a German chemical plant explosion cut a chunk of supply of a nylon resin used in brake and fuel systems.

The risk of production cuts is greater for car markers in the United States and France, and less in Japan and Germany, UBS said in a research note.

"We see high risk of production stoppages in the second quarter," UBS analysts said in the research note issued on Thursday. But they also saw an "equally high probability" that alternatives would be found within the same quarter.

The global supply of PA-12, used in several industries including auto manufacturing, was already stretched thin before the explosion at an Evonik Industries AG RAGES.UL plant in Marl, Germany on March 31, that led to the nylon resin shortage.

Auto experts and analysts are not clear how the shortfall would affect China, which has overtaken the United States as the world"s largest auto market.

Author:Anna Larionova
Tags:Dow, DuPont.
Category:General News
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