LyondellBasell declares force majeure on US PP out of Bayport

04 April 2014 18:05 Source:ICIS News

LyondellBasell declares force majeure on PP out of BayportHOUSTON (ICIS)--US polypropylene (PP) producer LyondellBasell announced this week it experienced a force majeure event at its Bayport, Texas, PP plant, sources said on Friday.

The company said it had experienced mechanical difficulties at the C, D and E lines of its Bayport production facility, which was resulting in the company declaring force majeure on products produced at the plant, according to a copy of a 2 April customer letter obtained by ICIS.

“We are currently evaluating the impact of this event on our production capability,” the letter states. “Additional information will be provided once we have assessed our ability to supply.”

It was not clear what the mechanical difficulties were, what allocation levels would be or how long the force majeure was expected to last.

A company spokesperson did not immediately return a phone call seeking comment.

Supply has been improving in the PP market in the past few weeks, as weather-related production problems that occurred in the first quarter have been resolved.

Demand has remained sluggish in the PP market, with buyers waiting to see what will happen with April prices before returning to the market.

One market participant said that the impact of the event will depend on how long it lasts, adding that if the plant is down long, it may actually result in lower polymer-grade propylene (PGP) prices, as the monomer they would normally use would end up in the spot market.

LyondellBasell in February had declared force majeure on PP out of the same plant, saying on 4 February that it had experienced mechanical difficulties on the C line of the Bayport production plant.

The company later that month declared force majeure on all PP manufactured and sourced out of the US based on severe weather conditions that affected rail transportation and the availability of truck and drivers.

Sources said that they never officially heard when those force majeures had been lifted, but agreed that supply has improved over the last month.

LyondellBasell has a 720,000 tonne/year PP unit at its Bayport facility, according to ICIS Plants and Projects.

LyondellBasell has had a spate of force majeures since February.

As well as the Bayport PP events, the company declared force majeure on all North American polyethylene (PE) grades, European butadiene (BD) supplies, European PP from its Carrington, UK plant, US vinyl acetate monomer (VAM) from its La Porte, Texas plant and US BD from its Channelview, Texas plant.

By Michelle Klump