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ILMA 2017 Annual Meeting Metalworking Fluids Committee Hyatt Regency Grand Cypress Orlando, Florida 3:00 – 4:30 PM (ET)
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ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

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Page 1: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

ILMA2017AnnualMeeting

MetalworkingFluidsCommittee

HyattRegencyGrandCypress

Orlando,Florida

3:00– 4:30PM(ET)

Page 2: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

ChlorinatedParaffinUpdate

ForILMAMetalworkingFluidsCommitteeMeetingOctober16,2017

Page 3: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Topics• UpdateonCPSubstanceonTSCAInventory• CanadaDSLPlans• UpcomingSNUR• MCCPEnvironmentalFateTestingProgram• FutureRiskEvaluationProjects

October16,2017 CPIAUpdatetoILMAMWFCommittee 3

Page 4: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

TSCAStatusofCPSubstances• 11newCPsubstancesaddedtotheTSCAinventoryinJuneandJuly2017coveringMCCP,LCCPandvLCCPrange

• Totalof14newCPsubstancenowonTSCAinventory

• AllnewCPsubstancesunderConsentOrdersand/orSignificantNewUseRule(SNUR)

• NewSNURexpectedforthe11recentlyaddedsubstances

• MetalworkingfluidapplicationspermittedforallnewCPsubstances

October16,2017 CPIAUpdatetoILMAMWFCommittee 4

Page 5: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

CPSubstancesonTSCA/DSL

October16,2017 CPIAUpdatetoILMAMWFCommittee 5

CAS Number Substance Name DSL Status

Medium-Chain (MCCP) (C14-17)

198840-65-2 Tetradecane, chloro derivs. Not listed

1372804-76-6 Alkanes, C14-16, chloro Not listed

85535-85-9 Alkanes, C14-17, chloro On DSL

Long-Chain (LCCP) (C18+)

2097144-48-2 Octadecane, chloro derivs. Not listed

106232-85-3 Alkanes, C18-20, chloro On DSL

2097144-45-9 Alkanes, C20-24, Chloro Not listed

2097144-43-7 Alkanes, C20-28, chloro Not listed

2097144-44-8 Slackwax (petroleum), Chloro Not listed

Very Long-Chain (vLCCP) (C21+)

1417900-96-9 Alkanes, C21-34-branched and linear, chloro. Not listed

1401947-24-0 Alkanes, C22-30-branched and linear, chloro. Not listed

288260-42-4 Alkanes, C22-30, chloro Not listed

1402738-52-6 Alkanes, C24-28, chloro Not listed

2097144-46-0 Hexacosane, chloro derivs. Not listed

2097144-47-1 Octacosane, chloro derivs. Not listed

Page 6: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

ExportNotification

• BeingregulatedunderaTSCA5actionrequiresexportnotificationsforthesenewCPsubstances.

• SuppliersofthesenewCPsubstancesarerequiredtonotifycustomersofthisrequirement.

• ILMAhasprovideguidanceandatemplateletterfortheseexportnotificationletters.

October16,2017 CPIAUpdatetoILMAMWFCommittee 6

Page 7: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

CanadianDSLPlans• Only3ofthenewCPsubstancesonTSCAarealreadyontheCanadianDomesticSubstancesList(DSL)

• PlanistogetallofthenewCPsubstancesontheDSL• ChemicalsnotontheDSLwillneedtogothroughtheNewSubstanceNotification.

• HavebeenworkingwithEnvironmentandClimateChangeCanada(ECCC)onapossibleexpeditedNSNreview.

• Dataisavailabletoaddressendpoints.• CPIAhasgeneratechemicalassessmentsandECCCisreviewingthedraftLCCP/vLCCPassessment.

October16,2017 CPIAUpdatetoILMAMWFCommittee 7

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NewCPSNUR• SNURmakestheCOlanguagelaw.Ensuresthatanynewsuppliersmustmeetthesamerequirements.

• MostcurrentusesarepermittedandwillnotrequireaSNUN,providedtheyare:“aflameretardantandplasticizerinPVCandpolymers;aflameretardant,plasticizerandlubricantinadhesives,caulks,sealants,andcoatings;anadditiveinlubricantsincludingmetalworkingfluids;aflameretardantandplasticizerinrubber;aflameretardantandwaterproofer totextiles.”

• MCCPenvironmentalfatetestingprogramisthemainrequirementfortheSNUR.

• Expecttobepublishedthisyear.

October16,2017 CPIAUpdatetoILMAMWFCommittee 8

Page 9: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

EPAMCCPTestingProgram• TechnicallyarequirementofallrecentlyapprovedCPs,regardlessofchain-length.

• Biodegradation• OECD308sedimentsimulationstudiesonC14,56%Cl(wt.)andC16,56%Cl(wt.)

• AquaticToxicity• OECD225sediment-waterLumbriculusandOECD211chronicdaphniastudiesonC14,30%Cl(wt.)

• IfadverseeffectsareobservedinC14studiesabovethetriggers,rungsametestswithC16,56%Cl(wt.)

• BioaccumulationTesting• OnlyIfadverseeffectsareseenintoxicitystudies• OECD315:BioaccumulationinSediment-dwellingBenthicOligochaetesandOECD305:BioaccumulationinFishinC16,56%Cl(wt.)

October16,2017 CPIAUpdatetoILMAMWFCommittee 9

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PastCPPBTTesting• Lotsofdataalreadyexisting,thoughnotnecessarilyonthesespecificguidelines.

• OnlyoneOECD308studyconductedonC10-C13,65%Cl• Veryslowdegradationbecausetestmaterialabsorbedtoorganicmatterinthetestingsystem

• Numerousaquatictoxicitystudies• ClassifiedastoxicinEUbasedprimarilyondaphniadata

• Numerousbioaccumulationstudies,includingbothfieldandlaboratorystudies.

October16,2017 CPIAUpdatetoILMAMWFCommittee 10

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Europe– MCCPTesting• Basedonpreliminarysubstanceevaluation,ECHAmandatedadditionalpersistenceandbioaccumulationofselect“components”ofMCCP

• ECHAacceptsthatMCCPupto50%Clbywt.isreadilybiodegradable(thereforenotaPBT).

• Thistestingfocusedonselectcarbonnumbers(C14andC15)inthe50-60%Clbywt.range.

• OECD308– sedimentbiodegradationstudies• OECD305– fishbioaccumulationstudies

• Newtechniquesonchemicalanalysishaveallowedfordirectevaluationofindividualcongenergroups(e.g C14H26Cl6).

• Phase1beingcompletedthisyear;Phase2tobecompletedbysummer2018.

October16,2017 CPIAUpdatetoILMAMWFCommittee 11

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AnalyzingCPBiodegradationbyCongeners

0

100

200

300

400

Cl2 Cl3 Cl4 Cl5 Cl6 Cl7 Cl8 Cl9 Cl10 Cl11 Cl12

Concen

tration(ug/l)

Congenergroup

TotalT=0 TotalT=120

October16,2017

CPIAUpdatetoILMAMWFCommittee 12

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FutureRiskEvaluationProjects• Applicationswiththepotentialforwatercontact,waterreleasesarelikelytobethefocusofanyfutureriskevaluationofCPs,includingMWFs.

• RiskassessmentofMCCPunderwayinEurope.• PotentialforfutureriskassessmentinUSA.

• Thereisanopportunitynowtodevelopdatathatcansupportlower/noreleaseestimatestoimprovetheenvironmentalriskassessments.

October16,2017 CPIAUpdatetoILMAMWFCommittee 13

Page 14: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

ThankYou!

AndrewJaquesChlorinatedParaffinsIndustryAssociation1250ConnecticutAvenue,NWWashington,DC20036Phone:+1.202.419.1504Email:[email protected]

October16,2017 CPIAUpdatetoILMAMWFCommittee 14

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REGULATORY UPDATE ON ISOTHIAZOLINONE BIOCIDES FOR USE IN MWF’s.

2017ILMAANNUALMEETING

Page 16: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

2017 ILMA MANAGEMENT FORUMMWF COMMITTEE

WE DISCUSSED THE PROPOSED RESTRICTION OF CIT/MIT BIOCIDE USE FOR MWF’S BY PMRA,

HEALTH CANADA

Page 17: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

• ASANOUTCOMEOFOURDISCUSSIONS,ILMAPROVIDEDDETAILEDINPUTTOPMRA,HEALTHCANADAONTHEISSUESRAISEDBYTHEIRPROPOSALTOLIMITTHEUSEOFCIT/MITTOINEFFECTIVELEVELSINMWF’s.

Page 18: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

• INTHEMEANTIME,HEALTHCANADAREQUIREDALLREGISTRANTSTOSUBMITLABELREVISIONSREFLECTINGTHEPROPOSEDREDUCTIONS.

• IMPLEMENTATIONOFNEWLABELSDELAYEDUNTILDECEMBER2018.

Page 19: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

• FURTHERCONTACTSINCEBETWEENACCITTASKFORCEANDPMRA.

• CLEARFEEDBACKTOTFTHATILMALETTER&MEMBERCOMPANYLETTERSWEREWELLRECEIVED.

Page 20: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

• INDISCUSSIONS,PMRANOTEDTHATUSEOFCIT/MITINMWFAPPLICATIONSDIFFERSFROMOTHERUSES,SPECIFICALLYWITHRESPECTTOINDUSTRYWORKPLACEEXPOSURECONTROLSINCLUDINGPPE.

• CERTAINLYANIMPLICATIONTHATTHEYMAYBEOPENTORECONSIDERINGMWFUSELEVELS.

Page 21: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

•OTHERUSERGROUPSAREENGAGED– CANADIANPAINT&COATINGSASSOCIATIONMETWITHPMRALATESEPTEMBERTOEXPRESSTHEIRCONCERNS.

•AKATTENDEDTOREPRESENTACCITTASKFORCE

Page 22: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

• PMRASTAFFINDICATEDALARGERELIANCEONEPA’SRISKASSESSMENT.

•ADDITIONALPMRAKEYCONCERNWASSENSITIZATION.•AKPOINTEDOUTTHATASPARTOFEPA’SREGISTRATIONREVIEWPROCESS,DCI’SHAVEBEENISSUESONTHEIT’S.

•NONEOFTHESEDCI’SINCLUDEAREQUESTFORADDITIONALSENSITIZATIONDATA.

Page 23: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

CURRENTSTATUS

• REGISTRANTSHAVENOWSUBMITTEDNEWPROPOSEDLABELS,WHICHINCLUDERESTORINGORIGINALMWFUSELEVELS.

• DECISIONSHOULDBERECEIVEDIN60– 180DAYS.

Page 24: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

GOINGFORWARD,PMRAHAVEINDICATED:

• THEYWILLINCLUDEMOREPUBLICPARTICIPATIONINFUTUREACTIONS– DEVELOPINGAPUBLICENGAGEMENTPORTALONTHEIRWEBPAGE.

•WANTTOINCLUDEBOTHREGISTRANTSANDEND-USERSINTHEIRPROCESS.

Page 25: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides

• BOTTOMLINEISTHATILMA/ILMAMEMBERSINPUTHASBEENHEARD,ANDWILLHOPEFULLYHAVEAPOSITIVEOUTCOME.

Page 26: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Biocides- USEPAUPDATE

• NOTHINGCURRENTLYHAPPENINGATEPAOTHERTHANCOLLECTINGDATAFROMREGISTRANTS.

Page 27: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

UEILUpdate

Dr.StephanBaumgärtel

Page 28: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Annex VIII ClP: Poison Centers

Dr. Baumgärtel 23.10.17

Page 29: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry
Page 30: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Registration 28. August 2017

3.April2017

(April2016)

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Article45CLP

• (…)MemberStatesshallappointabody(…)forreceivinginformation(…)

forformulatingpreventativeandcurativemeasures,inparticularinthe

eventofemergencyhealthresponse,(…).Thisinformationshallincludethe

chemicalcompositionofmixturesplacedonthemarketandclassifiedas

hazardous(…)includingthechemicalidentityofsubstancesinmixturesor

whicharequestforuseofanalternativechemicalnamehasbeen

acceptedbytheAgency,inaccordancewithArticle24

Page 32: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Poison center notificaion

• Who:• ImporterorDownstreamUserthatplacesmixturesonthemarket

• What:• Mixturesclassifiedashazardousforhumanhealthorphysicalhazard.• Excluded:Mixturesclassifiedforenvironmentalhazards,gasesunderpressureorexplosives.

• When:• Mixturesforconsumeruse:FromJanuary1st 2020• Mixturesforprofessionaluse:FromJanuary1st 2021• Mixturesforindustrialuse:FromJanuary1st 2024

• How:• UsinganharmonizePoisonCentreNotification(PCN)format.Beforeplacinginthemarket!

Page 33: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Required information 1/3

• Generalinformation:• Product identifier• Identifiers (e.g.CAS,ECnumber...)of mixture components• UniqueFormula Identifier(UFI)• Contact details of the submitter

• Hazards identification• Classification of the mixture and label elements• Toxicological information

Page 34: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

Required information 2/3

• Informationonmixturecomponents• Componentsofthemixtureandtheirconcentration,evennotclassifiedashazardous.

• Concentrationscanbeexpressedasexactpercentagesorasarangeofpercentages

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Required information 3/3

• Additionalinformation

• Type(s)andsize(s)ofthepackaging

• Colour (s),physicalstateandpHofthemixture

• ProductcategoryaccordingtotheEUProductCategorisation System

(InpreparationbyECHA)

• Use(consumer,professional,industrial)

Page 37: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

IndustrialUse

• Forindustrialmixturesitispossibletodoalimitedsubmissionof

information.

• Lessinformationrequirementsthanforconsumerandprofessional

mixtures.

• Companiesshouldprovideatelephonenumberwitha24/7oncallservice

andanemailaddressforrapidaccesstoadditionalinformation.

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UFI-Generatoris available onECHAWebsite

https://poisoncentres.echa.europa.eu/de/tools

Page 41: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

SCAQMDRule1430– ControlofToxicEmissionsfromGrindingOperationsat

ForgingFacilities

MikePearce

W.S.DodgeOilCo.

Page 42: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

IssueswiththeInternationalAgencyforResearchonCancer

&

AmericanChemistryCouncilInitiative

Page 43: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

IARC– ACCEfforts• InternationalAgencyfortheResearchonCancer(IARC)isapartoftheWorldHealthOrganization.

• ACCconcernedaboutscientificandprocessdeficienciesofIARCandtheresultingpolicydecisionspredicatedonitswork(e.g.,Prop65listingsvia“authoritativebodiesprovision).

• ACClaunched“CampaignforAccuracyinPublicHealthResearch”thatseeksto“promotecredible,unbiasedandtransparentscienceasthebasisforpubicpolicydecisions.”

• ACCsaysthatIARC’sapproachisfatallyflawed,inpart,becauseitonlyconsidersasubstance’shazardandwhetherachemicalcouldcausecancerinhumansatanylevelorunderanycircumstancesratherthanfocusingonreal-liferisksandexposurelevels.

• Over1,000substancesreviewed,findingonlyonesubstancethatwas“probablynot”likelytocausecancerinhumans.

• http://campaignforaccuracyinpublichealthresearch.com

Page 44: ILMA 2017 Annual Meeting Metalworking Fluids Committee · Chlorinated Paraffin Update For ILMA Metalworking Fluids Committee Meeting October 16, 2017. ... Chlorinated Paraffins Industry

ACCEfforts• ACCdomesticallyseekstoimprovegovernmentoversight

• HouseOversightandAppropriations– FewCongressionalInquires• ExaminecloselyhowU.S.dollarsarebeingused

• U.S.isalargecontributortoIARCthroughNIH• WorkingwithinternationalcounterpartstoapplypressuretoensureIARCacknowledgesissuesandaddressesthem,increasingtransparency

• Wanttoassembleindustrytradeassociationgroups• Currentlythereare6associations“signedon”• ACCwantsILMAtoparticipateasitseekstoofficially“launch”multi-associationeffortlaterthismonth

• Question:DoesMWFCommitteesupportthat?• Nofinancialcommitmentcurrently

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HurricaneIssues

All

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NewMWFSecretaryVote

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NewBusiness

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ChinaUpdate

Sourcingupdate2017

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InspectionsBegin• USAIndustrialRevolution=1760– 1840(80years).Chinahasseensimilargrowthin15years.• 2013,Chinapassedthe“10MeasuresforEnvironmentalProtection”whichoutlinedmeasurestoimproveChina’senvironment.

• MainpointwasshiftingfromGDPgrowthinregionsonlytoGDPgrowthwithinenvironmentalregulations.• June2017- Chinaannouncescrackdownonheavypolluters.• 2017- 5,600inspectorsbeganastrictoneyearinspectionoverairpollutionpreventionoverinthantwodozencities.

• Some5,600environmentalinspectorswillbesenttoBeijing,Tianjin,and26smallercitiesintheBeijing-Tianjin-Hebeiregionandnearbyareastocheckonimplementationofpollutioncontrolandemissionstandards.

• Latestreportgloballyisnearly14,000companies,or70percentofthebusinessestheyexamined,failedtomeetenvironmentalstandardsforcontrollingpollutions.4,700werefoundtobeinunauthorizedlocations.

• Thelatestannouncementfromaregionstatedthatoutof467enterprisesinspected,350,(75%),had“environmentalproblems”includedlackofpollutioncontrolandsewagetreatmentfacilities.

• Severalenterprises,includingarubberplantunderSinopecBeijingYanshan Company,werecriticizedfor"inadequatepollutioncontrolefforts,"whilesomegovernments,includingthoseofTangshanCityandYutianCounty,wereslammedforinactionandneglect.

• TheMinistryofEnvironmentalProtection(MEP)alsoexposedenterpriseswithfalseinformationandlocalgovernmentswithinadequatepollutionresponseplans.

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Who’sAffected?• NomoreGuanxi!–=

• Guanxi=thesystemofsocialnetworksandinfluentialrelationshipsthatfacilitatebusinessandotherdealings.

• LittletoNoWarningofAudits– 7-10days• UnclearRegulations– governmentpoliciesareopaque.Andnotevenawareofwhatexactlytheyneedtodotobecompliant.

• PortAudits(Qindao PortfailingHaz Class)• China19th Plenum(beforeandaftershutdowns)

• BadNewsisnotreleasedeasily.• Winter/SmogSeasonReducescapacity• LocalGovernments&Officialsnowbeingheldaccountable

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DCHA• DCHAwentfrommanyfactoriestoonly4thatarecurrentlyproducing.

• In2015and2016oversupplywasoccurringforDCHAandtherewaslittletonoprofitforfactories.

• SeveralCHA/DCHAplantscompletelyconvertedtheirfactoriestosomethingelse.Ruida ChemicalconvertedtoAminoAcidplantproduction.

• ItsmadebyreactingAniline(heat+pressure)withametalcatalyst(PalladiumorPlatinum).

• AnilineisalsorawmaterialwhichhasbeentightinChina.Anilinewillcontinuetobetightbutavailable.PricingforAnilinehasdoubledsinceJanuaryof2014.

• Todayismademostlyasaa co-productwithCHA.

• Factoriesareabletomanipulate%ofco-productsbasedoncatalyst.Sometimestheycanevenget98%and2%ratios.RightnowmostfactoriesfavorCHAaslarger%.

• Environmentalregulationhasseenahugepushin2016and2017.SomanyDCHAfactorieshaveswitchedtoCHAasmainproductwhichisusedwastewatertreatmentasaNeutralizerAmine.

• Governmentisforcingfactoriestostartregulatingandtreatingwastewater.CreatingalargedemandforCHAinChina.

• Eachfactoryhashadproductionissuesinthepastyear.Weakcatalystperformance,environmentalaudits,shutdown.

• Factoriesarestressedalso.NofactorywasbuilttosupplyallofWorld.DCHAfactoriescannotwin.Whentheyhaveittheymakenomoney.Whenitistighteveryoneismadatthem!

• DCHAisdifficulttomake.Soexpandingcapacityisnotaturnofaswitch.

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DCHAOutlook• Onceall4factoriesareupandrunningDCHAsituationshouldimprove.• Itwillremaintightbutavailable.• DCHAisstillarelativelysmallenoughglobalmarkettonotattractanylargescaleproducers.

• Shipmentsarebeingdelayed/cancelled/pushedbackaslocalcontractsarebeingsuppliedfirst.NorthAmericanisnotlocaltoanyone!

• Donotcountanysupplyuntilitisliterallyonthewater.• Planinventoryaccordingly,itmightbe4-5monthsbeforeregularsupplyisre-established.