Bloomberg News

BASF, ThyssenKrupp Become Raw-Material Allies to Combat Shortage

November 23, 2011

Nov. 17 (Bloomberg) -- BASF SE, the world’s biggest chemical maker, and steel company ThyssenKrupp AG are among at least 12 German businesses that have agreed to form an alliance to secure raw materials and combat shortages and price increases.

The BDI industry federation is coordinating the alliance which will be founded at the beginning of next year, Alexander Mihm, a spokesman for BDI said by telephone today. The cooperation could include raw materials from copper to rare- earth metals.

“Despite some recent price reductions in the raw-material sector, the situation will stay tense in the long term,” Ulrich Grillo, head of the BDI’s raw-material committee, said in an e- mailed statement. “It’s unlikely that problems securing raw materials will ease significantly.”

The World Trade Organization in July said that Chinese restrictions on exports of some raw materials violate global rules. China also limited domestic output and exports of rare- earth materials, used in products ranging from wind turbines to hybrid cars to guided missiles, a move that sent some rare- earths prices up sixfold.

The founding of the alliance will cost participants several hundreds of thousands of euros and once projects begin, other contributions will be needed, Mihm said. The forming of the alliance was earlier reported by Handelsblatt.

--Editors: Andrew Noel, Robert Valpuesta

-0- Nov/17/2011 11:05 GMT

-0- Nov/17/2011 11:18 GMT

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net -0- Nov/17/2011 10:48 GMT


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