INEOS declares force majeure on HDPE supplies from Lillo

The exact status of the Lillo HDPE plant was not known on Wednesday, but INEOS had been experiencing some major production issues throughout January.

The plant had been running at reduced rates since a power outage brought both of its lines down during the first week of January.

The 180,000 tonne/year HDPE line restarted after being shut down for five days. INEOS restarted the 240,000 tonne/year line three weeks later.

Both production lines at Lillo were due to be taken off line for two weeks of planned maintenance work in March, the source said.

Buyers have been affected by the production problems at Lavera and Lillo.

“We have been struggling with deliveries this month,” said a large buyer.

HDPE producers had been targeting price increases following the €25/tonne increase ($34/tonne) in the February ethylene contract price, and increases were going through.

HDPE margins had been very poor in late 2010, and sometimes HDPE prices were barely above the ethylene contract level, but margins were now improving.

However, HDPE was still widely regarded in the market as the PE grade with the worst margins.

Net HDPE blowmoulding prices were around €1,200/tonne FD (free delivered) NWE (northwest Europe) at large accounts.

HDPE is used in the food packaging and household goods sectors.

($1 = €0.73)

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