2013 a bad year for force majeures

Chemical companies

FMs Jan14

2013 wasn’t a good year for plant reliability.  The blog’s 6-monthly survey of force majeure reports in ICIS news shows:

  • There were 386 reports of force majeures in 2013
  • This was very similar to the 391 level seen in 2010
  • It also reverses the decline seen in 2012 after the record 495 reports in 2011

This is a worrying performance, given that the industry has been profitable over the period.  This meant there was very little excuse for companies not spending the necessary money on maintenance.  And, of course, the tools for improving reliability have been improving all the time.

Even more concerning, as the chart shows, is that force majeures in 2013 (red square) were above 2012 levels from May onwards.  They also reached a record high in the June – August period, and were close to previous peak levels for the rest of the year.

Companies may well come to regret this short-sighted attitude.  During periods of good profitability, customers usually don’t have too many choices.  But when demand slows down, as seems likely in 2014, then reliability becomes a critical factor for them.

Equally, companies who have economised on maintenance during the good times, will find it more difficult to increase their spending when profits slow.  Whilst their lower reliability will make it more difficult for them to exploit the opportunity to operate successfully during upturns.

In addition, of course, there is the core issue of safety.  Poor maintenance and lack of training has a direct correlation with an increase in safety incidents.  This can not only lead to tragic consequences, but also threaten a company’s license to operate.


Beijing smog makes it "almost uninhabitable for human beings"


Chapter 6 of Boom, Gloom and the New Normal in October 2011 was one of the firs...

Learn more

Sentiment weakens as US stock markets wait for more QE


Sentiment, as measured by the IeC Boom/Gloom Index has weakened considerably ove...

Learn more
More posts
Look for Winners and Losers in 2021

“There are decades where nothing happens; and there are weeks where decades happen”. Lenin’s f...

Chemicals in the eye of the storm as UK heads for a WTO Brexit on 1 January

On Friday, the UK premier confirmed what many of us have expected for a long time. There is unlikely...

Chemical industry has key role in helping to create a more sustainable world

The chemical industry has a critical role to play in enabling the world to “build back better&...

Local circular plastics solutions to replace mega projects business model

NEW YORK (ICIS)–There will be a paradigm shift away from mega crackers producing massive volum...

Reshoring set to create Winners and Losers as advanced manufacturing takes over

Not many companies still operate in the same way as 500 years ago, or even 50 years ago. But in manu...

Polyethylene’s crisis will create Winners and Losers

Polyethylene markets (PE) are moving into a crisis, with margins in NE Asia already negative, as I h...

Day of reckoning approaches for US polyethylene expansions, and the European industry

Planning for future demand in petrochemicals and polymers used to be relatively easy during the Baby...

Stormy weather ahead for chemicals

Four serious challenges are on the horizon for the global petrochemical industry as I describe in my...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more