No immediate effect on Europe PO from Shell Moerdijk plant issues

12 July 2013 10:41  [Source: ICIS news]

LONDON (ICIS)--The European propylene oxide (PO) market was stable on Friday with no immediate price spikes or supply issues following production problems at Shell Chemical’s styrene monomer/propylene oxide plant in Moerdijk, the Netherlands.

On Monday this week, Shell confirmed it had declared force majeure on styrene "as a result of an unforeseen heat exchanger failure" at the plant, adding that it was “unable to manufacture and supply its agreed amounts of products”.

On Friday,  a spokesperson said the "force majeure is valid for only styrene monomer" and declined to comment further on its PO production.

A European PO producer does not expect there to be an immediate impact on prices.

"Maybe [it could have an effect] in the next few weeks," the producer said.

"It depends how long Shell has the problem. Maybe it will only impact styrene, [right now] there is no impact on PO we can see."

A trader noted there is enough availability to keep the market stable in the near term.

"PO is definitely not short," the trader said. "But we need to wait and see how it will affect [the market]."

By: Stefan Naidu
+44 208 652 3214

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