Europe Total lifts force majeure on HDPE, PP to come – buyers

LONDON (ICIS)–Total Petrochemicals’ force majeure on high density polyethylene (HDPE) from Gonfreville, France, should be lifted today, Monday 27 January, but polypropylene (PP) restrictions will remain in place until 1 February, if all goes according to plan, said buyers on Monday.

Total Petrochemicals was not available but in general does not comment on the status of its operations.

Force majeure was called on HDPE on 30 December 2013, and PP restrictions were imposed some days later, thought to be due to cracker issues at the site.

“We’ve had a letter to say if we don’t hear anything to the contrary, HDPE force majeure will be lifted on 27 January, that’s today, and PP on 1 February,” said one buyer.

The legal restrictions have had little impact on the HDPE and PP markets in Europe after the initial flurry of concern they caused, as demand has slowed down and availability is ample in both sectors.

Spot prices have begun to fall as most players expect lower prices in February. Expectations of lower prices stem from lower naphtha prices that will affect monomer settlements for February.

Naphtha prices have rallied, however, and one polyethylene (PE) producer said it would be watching them closely this week to see where monomer might land. On Friday naphtha closed at $921-922/tonne CIF (cost insurance freight) NWE (northwest Europe), following a dip below $900/tonne on Friday 17 January.

On Monday naphtha prices were assessed slightly down at $918-920/tonne CIF NWE.

In the face of such volatility, downstream polymer markets are at a standstill.

Monomer contracts are expected to settle by the end of this week.

HDPE spot prices were languishing in the mid-€1,200s/tonne FD (free delivered) NWE on Monday, and PP spot homopolymer injection prices were at €1,230-1,260/tonne FD NWE.