US Formosa Plastics declares force majeure on suspension grade PVC

HOUSTON (ICIS)–Formosa Plastics USA has declared force majeure for its Formolon suspension grade polyvinyl chloride (PVC) resins from both its Point Comfort and Baton Rouge manufacturing facilities as of 14 August due to “unexpected difficulties in its upstream facility” at Point Comfort.

The company notified market participants in an email notice sent late Friday afternoon and comes less than a week after the company declared force majeure on polypropylene from the facility.

The PVC outages are likely to play a role in domestic and export supply, already deemed slim to tight by market participants.

It is also likely to play a role in domestic contract discussions where separately proposed increases of 3-4 cent/lb are on the table for August and at least one producer has announced intentions to seek an additional 3 cent/lb in September.

The Point Comfort plant has production capacity of suspension grade resins of 800,000 tonne/year,  according to the ICIS Supply and Demand Database.

The company did not immediately respond to request for further information on Monday.

The notice was sent to both domestic and export customers of the plant.

Although Formosa did not specify the nature of the upstream difficulty, the plant’s neighbouring chlor-alkali facility has been down for two months for a planned maintenance that last almost twice as long as expected, according to company and market sources.

The chlor-alkali facility provides chlorine feedstock for the production of PVC and is now in the process of a restart.

Market participants speculated that a complication with the restart may be the cause or part of the cause of the force majeure.

The degree of curtailed PVC production was not detailed in the letter to customers, but was said to affect both Point Comfort and the company’s Baton Rouge PVC manufacturing. The Baton Rouge facility has annual production capacity of 470,000 tonnes, according to the ICIS Supply and Demand Database.

The company’s Formolon suspension resins are made across a variety of grades, including K values of from K56-K73.

Major US producers of PVC include Shintech, Westlake Chemical, Formosa Plastics and OxyVinyls.

Thumbnail image shows pipes, which are made of PVC. Photo by  Marion Fichter/imageBROKER/Shutterstock