Dow extends force majeure on methyl acrylate in Mexico

26 February 2010 21:40  [Source: ICIS news]

HOUSTON (ICIS news)--Dow Chemical has extended force majeure (FM) on its methyl acrylate (methyl-A) produced in Cangrejera, Mexico, the US producer said on Friday.

An equipment failure at Celanese - Dow’s methyl-A toll manufacturer at the site - was described by a Dow source as a “massive setback” in its ongoing effort to lift FM at the site.

Celanese spokesman W Travis Jacobsen said the company does not comment on its manufacturing operations. But a source confirmed that Celanese declared FM on its methyl-A production at Cangrejera on 22 January, after an unspecified equipment failure.

Neither Dow nor Celanese provided their methyl-A capacities at the site.

Dow initially declared FM on its methyl-A production at the site on 30 June 2009, after losing complete production capability when its feedstock propylene supplier, Petroleos Mexicanos (Pemex), experienced operational problems.

The plant resumed production in late July after some propylene supply was restored, but it was not sufficient enough to allow Dow to lift its 100% sales allocations, the company said.

Although Dow was initially optimistic it could lift its FM by the end of 2009, methyl-A has remained on allocation, sources said.

The Celanese incident prompted Dow to take its allocations below 100%, the company said without being more specific.

“We were more comfortable before the Celanese incident,” a company source said. “But the issue now is really inventory. ... That inventory gap means we will be digging out of this for several months.”

February contract prices for North American methyl-A are 81-88 cents/lb ($1,786-1,940/tonne, €1,322-1,436/tonne), according to data from global chemical market intelligence service ICIS pricing.

Other US producers of methyl acrylate include BASF and Arkema.

($1 = €0.74)

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By: Larry Terry
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