PO buyers unfazed by LyondellBasell FM on rail deliveries

26 April 2013 13:46  [Source: ICIS news]

LONDON (ICIS)--European propylene oxide (PO) buyers are largely unaffected by LyondellBasell’s force majeure on its rail deliveries in the Rotterdam area, because of sufficient coverage from others or other transport means, said market sources on Friday.

One customer said that LyondellBasell declared the force majeure on PO rail deliveries “as a precautionary measure”, adding that it “won't lose any sleep over it, as there is loads of swap material available”.

A few other buyers said they had not heard about, or seen, logistical constraints in the market. This is despite LyondellBasell's logistical problems coming at a similar time to some PO plant turnarounds for two suppliers in April. These are thought to include one of LyondellBasell’s PO units in Europe, although this was not confirmed at source.

All of the above buyers remain unfazed by the possible effects on PO supply, saying that the turnarounds were planned and have been covered. They said any logistical constraints are localised and are being managed.

One buyer, by contrast, said: “It has been a tough month in April to get product on time.” It attributed this to logistical problems for LyondellBasell and mismatched rail tank car availability for another supplier, although the latter was not confirmed at source.

The same buyer said it had secured sufficient product, but acknowledged that it was a small player. It added that other PO customers, which are pipeline connected, have been unaffected.

One PO seller said it had seen some good demand this week – although it said it was difficult to pinpoint whether this was linked to a seasonal pick-up in downstream demand or more related to logistical problems.

By: Heidi Finch
+44 20 8652 3214

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