Threat of PET cuts after third force majeure at BP Belgium PTA unit

28 January 2011 10:55  [Source: ICIS news]

Europe faces threat of PET cutsVALENCIA, Spain (ICIS)-- European polyethylene terephthalate (PET) supply is under threat following a third declaration of force majeure upstream at BP’s Geel, Belgium, purified terephthalate (PTA) plant, sources said on Friday.

“We are risking going on force majeure on PET because we may not be able to supply our contract customers,” a PET producer said.

Another PET producer acknowledged that it too would have to run at “very low capacity”, lower even than it had been during BP’s first two forces majeures.

“Hopefully we won’t have to stop,” the second producer said.

A BP spokesman explained that the third force majeure was announced on Thursday on PTA 3 because of an agitator problem. For the time being, the unit was producing at full rates.

Market sources were preparing for further cutbacks, however.

“If PTA 3 does have problems we would need to come down to 25% [allocation]. It depends on how it performs this week and into next week,” the BP spokesman said.

If BP withdrew such an important percentage of production from the European market in December, January and possibly February, the impact would hit the whole chain, another PTA producer said.

“It is clear we are supporting contract customers when possible to try to relieve the impact [of the force majeure]. After December and January, the margin to do so is limited,” the second PTA producer warned.

BP initially declared force majeure and went down to 70% allocation in December on PTA 2 because of technical difficulties with an agitator. The allocation was then lifted to 90% in January as a result of an unrelated problem.

($1 = €0.73)

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By: Caroline Murray
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