Total declares force majeure on PP copolymer from US Texas plant

Source: ICIS News

2018/06/05

HOUSTON (ICIS)--Total Petrochemicals and Refining USA declared a force majeure on all of its impact copolymer polypropylene (PP) products from its plant in La Porte, Texas, according to a customer letter obtained on Tuesday.

The letter attributed the force majeure to a series of unplanned and external events that have impacted production levels.

As a result, Total will implement an allocation program for impact copolymer PP starting with shipments on 11 June.

Total’s PP plant in La Porte has a capacity of 1.224m tonnes/year.

The company did not immediately respond to a request for further comment.

The US PP market had already been facing supply tightness in the wake of LyondellBasell’s force majeure from its 638,000 tonne/year PP plant in Lake Charles, Louisiana.

While demand has been good in recent months, there is some suggestion that demand may slow down in June following a sharp spike in domestic PP contract prices.

May propylene contracts settled with a 5 cent/lb ($110/tonne) increase from April, the first increase in propylene contract prices since January. In addition to the 5 cent/lb rise in propylene prices, producers had also been seeking 3-5 cents/lb in margin expansion. Most participants anticipate that around 1-2 cents/lb of margin expansion will be reflected in May PP contracts.

US PP contracts are generally formula-based and are set at polymer grade propylene (PGP) values plus an adder.

ICIS assessed April contracts for homopolymer PP injection at 65-69 cents/lb delivered in bulk US, while contracts block copolymer PP were assessed at 66-70 cents/lb with the same terms.

Major US PP producers include Braskem, ExxonMobil, Formosa, INEOS, LyondellBasell and Total Petrochemicals.

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