INEOS Phenol to declare force majeure on phenol, cumene problems

15 July 2011 11:56  [Source: ICIS news]

LONDON (ICIS)--Global phenol producer INEOS Phenol will today declare force majeure to its phenol customers because of cumene supply problems, a company source confirmed on Friday.

“We got information on the morning of July 13 that BP Gelsenkirchen declared force majeure on cumene because of a technical issue, and today we got official confirmation of force majeure from Dow Terneuzen on cumene because of a problem with the catalyst there,” the source said.

In relation to the severity of the problems at BPRP (Refining & Petrochemicals GmbH) and Dow, INEOS Phenol said it had “no idea” how long the problems would last, but added that this was a “serious problem” for their phenol production.

“We have no idea how long this will last, but it’s serious. We have nothing out of the pipeline from BP, and Dow goes out today to make a benzene wash.”

INEOS Phenol notified their customers of the feedstock problem on Wednesday, but could not give formal notice until their cumene suppliers had officially declare force majeure.

“We needed to reduce [phenol] production to 50% with immediate effect on Wednesday, and we went out to inform customers we can deliver the expected volume. However, there is no concrete percentage we can give on volume [to our customers] because we don’t know when BPRP will start. There are a lot of scenarios for this month,” the INEOS Phenol source concluded.

Meanwhile, news of the phenol shortage caused concerns in the market, particularly since INEOS Phenol has a major turnaround planned at its plant in Antwerp, Belgium.

Antwerp has two lines with a combined capacity of 680,000 tonnes/year of phenol and 480,000 tonnes/year of acetone.

The plant will go into planned maintenance in September for four weeks. The outage was originally planned for two. In a normal situation, the company should be building stocks at this time.

Regarding the force majeure, one phenolic resin producer said: “INEOS is big and has many swaps with others, so there are others who are not covered – it affects the whole market.

“I think this may spark fresh demand from our customers, who will be worried about availability,” he added.

Another buyer said: “I am really worried about September; there could be serious problems for us. INEOS have told us to look elsewhere for our phenol. If you aren’t contacted, God help you.”

The news of the force majeure comes at a time when European producer Novapex is about to enter into a planned turnaround in Roussillon, France.

“Phenol production will stop on 28-29 July, with cumene a day later. The plant will be down for two weeks and is due back up around 13-14 August,” a Novapex source said.

The Roussillon facility has the capacity to produce 175,000 tonnes/year of phenol and 108,000 tonnes/year of acetone.

INEOS Phenol has not declared force majeure on acetone.

($1 = €0.71)

For more on phenol visit ICIS chemical intelligence

Please visit the phenol ICIS plants and projects database

By: Julia Meehan
+44 20 8652 3214

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