Total declares force majeure on Europe polypropylene

06 May 2010 17:53  [Source: ICIS news]

LONDON (ICIS news)--Total Petrochemicals has declared force majeure (FM) on polypropylene (PP) deliveries in Europe, the company said in a letter to customers on Thursday, due to a technical fault at an undisclosed facilty.

The letter reported an "unforeseeable and extraordinary" technical problem, related to the supply of propylene, which led to three PP lines being stopped in emergency mode on Wednesday 5 May.

In the letter, Total said it would do its utmost to ensure continuity of supply, but that it would face very difficult times in the coming weeks.

Although the plant was not named, market sources suggested it was the 850,000 tonne/year Feluy facility. However, further details were unavailable and the company declined to comment.

PP availability in Europe was already tight, mainly due to propylene supply issues, which had seemed to be easing into May.

Producers were targeting higher prices again in May, after pushing through hefty hikes in April, leaving net homopolymer prices around €1,250/tonne FD (free delivered) NWE (northwest Europe).

Buyers had taken increases of around 30% in 2010 up to the end of April. Some had expected May to be the top of the current cycle, but buying sources were concerned.

“This will cause chaos,” said one large buyer. “In the current situation we will be letting our customers down. All our products are tight. Availability is the main issue. I will be looking for extra volume with other producers but I don’t know whether I will be able to find any.”

PP producers in Europe include LyondellBasell, Borealis, SABIC, Total Petrochemicals, Dow Chemical, Repsol, INEOS Olefins and Polymers, Polychim and Domo.

($1 = €0.78)

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By: Linda Naylor
+44 20 8652 3214

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