HOUSTON (ICIS)--Pinnacle Polymers has declared a force majeure on production of polypropylene (PP) from its plant in Garyville, Louisiana, ICIS learned on Thursday.
The Pinnacle Polymers plant can produce 410,000 tonnes/year of PP.
The US PP market has been facing concerns about the possibility of demand destruction following the large jump in the January propylene contract, which initially settled with a 9 cent/lb ($198/tonne) increase this week.
US PP prices are generally formula-based and are set at polymer grade propylene (PGP) values plus an adder. Even prior to the most recent jump in PGP costs, the arbitrage window between Asia and the US had been open for PP, at least on paper.
Participants comment that a larger volume of imports has been attracted to the market following the large jump in PP contract prices, with additional volumes of imports likely to arrive in February.
Major US PP producers include Braskem, ExxonMobil, Formosa, INEOS, LyondellBasell and Total Petrochemicals.
Image above: These are bottle caps, and they are often made of PP. Source: Eye Ubiquitous/REX/Shutterstock