Formosa Plastics lifts force majeure on PP and HMW HDPE

08 July 2013 21:34  [Source: ICIS news]

HOUSTON (ICIS)--US polymers producer Formosa Plastics has lifted force majeure declarations for both polypropylene (PP) and high molecular weight (HMW) high density polyethylene (HDPE), a company spokesman said on Monday.

The company declared force majeure on HMW HDPE in May, following a flash fire at its Point Comfort complex in Texas on 2 May. The complex has an HDPE capacity of 650,000 tonnes/year, but it was not clear how much of that was dedicated to HMW HDPE  production.

Supply of HMW HDPE material has been very tight since the incident. The outage at Formosa, along with other unplanned outages in the PE sector, helped to contribute to tight supply and higher pricing for HDPE in June, sources have said.

Formosa Plastics declared force majeure on PP on 11 June, based on unplanned outages at the company's plant in Point Comfort, Texas. Formosa has two PP units at its Point Comfort facility, each with a capacity of around 430,000 tonnes/year.

A spokesman said he could not provide information on whether the plant had returned to normal production levels but could confirm that the force majeure had been lifted.

Supply in the PP market remains very tight. While the lifting of the force majeure from Formosa will help, sources said they expect supply tightness to continue, particularly in light of recent announcements from other producers saying they would have to reduce deliveries of PP.

Pinnacle Polymers declared force majeure on PP on 24 June, based on difficulty obtaining propylene at its facility in Garyville, Louisiana. The company has a 470,000 tonne/year PP plant at that location, according to ICIS plants and projects.

Phillips 66 announced last week that it would reduce deliveries of PP to customers, also because of difficulty obtaining enough feedstock propylene to keep up with production.

While the company did not specify allocation levels, it said it would apportion material in a "fair and reasonable" manner so that it can build inventory to carry it through a turnaround at its Linden complex in New Jersey, set to begin on 1 October. Phillips 66 has a 350,000 tonne/year PP plant at that complex, according to ICIS plants and projects.

By: Michelle Klump
+1 713 525 2653

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