LyondellBasell declares FM on US acetic acid, extends VAM FM

HOUSTON (ICIS)–LyondellBasell declared force majeure on US acetic acid on Tuesday and extended its force majeure on vinyl acetate monomer (VAM) issued in March, citing utility and feedstock supply disruptions.

Besides the force majeure on acetic acid, the producer issued a declaration in March on VAM, which uses acetic acid as a feedstock. LyondellBasell said both force majeures would take effect immediately.

In late May, sources said LyondellBasell’s 544,000/tonne acetic acid unit in LaPorte had gone down because of problems getting carbon monoxide (CO) delivered. Since then, sources have said the plant is operating but at limited capacity.

LyondellBasell did not return a call inquiring about the acetic acid plant.

LyondellBasell’s letter to its customers said it would contact them once the company had assessed its ability as a supplier.

Sources said that prices have yet to be affected. The US acetic acid export range remained at $700-745/tonne FOB (free on board), sources said.

Major US acetic acid producers include Celanese, BP, Eastman Chemical, LyondellBasell and DuPont.

In late March, LyondellBasell issued a force majeure on VAM made at its 385,000 tonne/year LaPorte unit because of a compressor breakdown.

All of the major US VAM producers have experienced a supply squeeze this year, partly because of US maintenance and plant problems and also because of plant closures in the UK and Spain in late 2013.

DuPont also declared force majeure in March on VAM made at its 335,000 tonnes/year plant in LaPorte, Texas. Sources this week said the force majeure at that plant – now owned by Kuraray – would be extended through June.

Dow Chemical began a 50-day turnaround at its 365,000 tonne/year VAM unit in Texas City in late April. Sources said this week that plant is still down.

US VAM spot prices remained stable this week at $1,600-1,700/tonne.

However, South American buyers, who have been trapped in a price war with European customers for US VAM, have reported obtaining material from China at prices around $200/tonne lower than US prices.

Major US VAM producers include Celanese, LyondellBasell, Kuraray and Dow Chemical.