UpdateTotal calls force majeure on PP, PS, PE over French strikes

21 October 2010 15:19  [Source: ICIS news]

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LONDON (ICIS)--French petrochemicals producer Total has declared force majeure across all grades of polyethylene (PE), polypropylene (PP) and polystyrene (PS) as a result of the ongoing strike action in France, a company source said on Thursday.

The company was forced to call force majeure on 18 October as transportation of raw materials to facilities was proving difficult. As a result, production of all polyolefins had slowed considerably.

“We were obliged to call force majeure because of the strike action in France,” the company source said, before adding: “We have problems with the refineries, the transport of product. Stocks are low and we have to juggle our October commitments.”

Looking forward, the situation was unclear in both the PP and PE markets. The Total source said: “It is difficult to know what is going to happen because of the strike; it could be resolved tomorrow, it could continue for the rest of the month.”

However, higher prices were envisaged for PS as availability looked set to be even tighter going into November.

Several PE and PP producers also expected this tighter availability to translate into higher prices, indicating hikes of €30-70/tonne ($42-98/tonne) at this early stage.

However, others sellers felt that the strikes alone would not provide enough upward pressure.

“It will take a monomer increase, a few other production issues and the [Total] force majeure to raise prices outside of France,” a large PE and PP distributor commented.

“There is building import pressure [on several grades] and the markets are more or less balanced; we have not seen any impact on availability from the French strikes yet.”

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By: Stephanie Wilson
+44 20 8652 3214

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