LyondellBasell declares force majeure at US HDPE plant

12 September 2013 21:04  [Source: ICIS news]

LyondellBasell declares force majeure at US HDPE plantHOUSTON (ICIS)--LyondellBasell declared force majeure on Thursday at its biggest high density polyethylene (HDPE) plant in North America and for all its products there because of mechanical difficulties, the company said in a letter sent to customers.

“Though the extent of the impact has not yet been fully defined, we are issuing this notification to ensure that you are aware of the situation. We will be contacting you regarding product availability once more details are identified,” the company said in a copy of a letter obtained by ICIS. The force majeure is effective immediately.

The plant is in Matagorda in Texas, and it has a capacity of 695,000 tonnes/year, according to ICIS plants and products.

Company spokesman Brent Connett did not immediately respond to a request for comment.

Market sources said the force majeure will likely pressure prices for all US PE products for the September contract.

One producer said he expected PE products could see increases of 3-5 cents/lb ($66-110/tonne, €50-83/tonne) as a result of the force majeure by LyondellBasell.

All producers had already been seeking a 5 cent/lb increase in HDPE for September contracts since last month and product availability was already tight before the force majeure.

While earlier pushes for increases did not succeed, this time they likely will because of lower supplies and relatively stronger demand.

Sources on the buy side agreed an increase is possible this month, since ExxonMobil announced late last month an allocation from its biggest HDPE plant in Baton Rouge, Louisiana, the result of problems with a pipeline carrying ethylene to the plant.

($1 = €0.75)

By: Renzo Pipoli
+1 713 525 2653

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