03 October 2013 20:54 [Source: ICIS news]
HOUSTON (ICIS)--Formosa Plastics high density polyethylene (HDPE) unit at its Point Comfort, Texas, site has been restarted following an accident in mid September that led to a force majeure declaration, a market source familiar with the situation said on Thursday.
The source said the restart was on Wednesday and that the unit is operating at full capacity as of Thursday afternoon.
The comment comes after the company on 17 September declared force majeure on its HDPE production from the plant. At the time, the force majeure was attributed to “unexpected operational difficulties” that followed an accident that required the sending of five maintenance workers to the hospital.
The HDPE unit had been down for maintenance when the accident happened.
Formosa has capacity to produce 650,000 tonnes/year of HDPE in Point Comfort, according to ICIS plants and projects. While the percentage of HDPE production that was lost due to the difficulties is not known, market sources have said that the force majeure at this plant contributed to a 5 cent/lb ($110/tonne, €81/tonne) increase of contract prices of all polyethylene (PE) grades for the month of September.
A company spokesperson confirmed that the plant has started operations, but did not specify a date.
The force majeure declared by Formosa at the time aggravated a situation in the US market because HDPE inventories had already been tight.
Just six days earlier, LyondellBasell had also declared force majeure due to an incident at its HDPE plant in Matagorda, Texas. At the end of August ExxonMobil had declared a sales allocation on HDPE production from its Baton Rouge plant in Louisiana, which had started the HDPE inventory tightness.
Following the September contract price increase, HDPE blow moulding prices were assessed by ICIS at 79.00-81.00 cents/lb for product delivered in the US, considering the price that buyers purchasing less than 20m lb/year (9,000 tonnes/year) could get. HDPE injection grade prices, on similar basis, were assessed at 80.00-82.00 cents/lb.
($1 = €0.74)
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