Seven Europe producers’ FMs continue to add to PE, PP supply woes

Focus article by Linda Naylor

LONDON (ICIS)–Seven European polyethylene (PE) and polypropylene (PP) producers have force majeure (FM) in place on PE and PP grades at present, according to ICIS data.

Most cases of FM were called in March, with the most recent case coming from Total in early April (see table below).

*low density polyethylene
**high density polyethylene
***linear low density polyethylene

All of the above cases of FM have been confirmed by ICIS.

Some HDPE buyers said last week that the LyondellBasell plant in Munchsmunster, Germany, was due back on stream over the weekend of 18-19 April, but LyondellBasell declined to comment on the status of the plant on Monday, according to its policy.

Elsewhere sources said LyondellBasell had FM in place on PP from Tarragona, Spain and Ferrara, Italy. This was not confirmed.

These legal restrictions have come at a time when product availability was already tight, particularly in the linear low density PE (LLDPE) and high density PE (HDPE) markets, as imports have been reduced in recent months.

Stocks with both buyers and sellers were empty, adding to the tightness when buyers came back to buy on a rally in crude oil and naphtha prices.

PE and PP buyers have been hard hit by the tightness of availability caused by a weak euro that has led a lack of imports and stronger exports, and exacerbated by the number of FM restrictions in Europe at present.

Prices have risen by up to almost €200/tonne in some cases in the PE market, while PP increases have been a little more moderate, but still reaching close to €200/tonne in some cases.

PE and PP are used widely in packaging and the manufacture of household goods. PP is also used in the automotive sector and PE in the agricultural industry.