LyondellBasell declares force majeure on US PE, citing bad weather

HOUSTON (ICIS)–LyondellBasell informed customers it was declaring force majeure for all North American polyethylene (PE) grades, sources said on Thursday.

The force majeure is related to “logistical delays with our transportation carriers due to severe weather”, according to a copy of a customer letter obtained by ICIS.

“We are currently evaluating the impact of this event on the capability of transportation facilities and carriers to deliver product. As such, you may experience delays in receiving shipments,” the letter states. “Though the extent of the impact has not yet been fully defined, we are issuing this notification as soon as possible to ensure that you are aware of the situation.”

A company spokesman said the company does not comment on production-related issues or communications with customers.

Some sources said declaration of a blanket force-majeure for transportation-related issues was unusual. However, many buyers said they had been experiencing delays receiving material from multiple suppliers because of bad weather.

The announcement is the latest supply disruption to hit the PE market, following announcements by ExxonMobil about allocations of high molecular weight high density polyethylene (HDPE) this week and an announcement of a force majeure by INEOS at its La Porte, Texas, facility last week.

Sources said it was becoming increasingly likely that given so many supply disruptions, producers will be able to fully implement a proposed 4 cent/lb ($88/tonne) price hike for February.

Lyondellbasell has a total PE capacity, including HDPE, low density polyethylene (LDPE), and linear low density polyethylene (LLDPE) in the US of around 2.7m tonnes/year at nine plants, according to ICIS plants and projects.

Source: ICIS plants and projects