LyondellBasell declares force majeure on US PP out of Texas

06 February 2014 19:28 Source:ICIS News

HOUSTON (ICIS)--LyondellBasell informed customers it was declaring force majeure for polypropylene (PP) produced at its Bayport, Texas, plant, sources said on Thursday.

The force majeure, which went into effect on 4 February, is related to “mechanical difficulties experienced at the C line of our Bayport production facility”, according to a copy of a customer letter obtained by ICIS.

“We are currently evaluating the impact of this event on our production capability. Additional information will be provided once we have assessed our ability to supply,” the letter states. “Though the extent of the impact has not yet been fully defined, we are issuing this notification to ensure that you are aware of the situation and expect adjustments to the current allocation program.”

A company spokesman said the company does not comment on its production related issues or communications with customers.

The US PP market has seen other supply disruptions, including a notice on Wednesday of allocation of specific homopolymer PP products produced at ExxonMobil’s Baton Rouge, Louisiana, plant.

Sources have said it is not clear how the allocations will impact prices in the PP market. Market participants are expecting PP prices to fall by around 1-1.5 cents/lb ($22-33/tonne) in February, based on movement in the polymer-grade propylene (PGP) market.

Some sources said the supply disruptions may hurt the secondary markets more than contract customers.

LyondellBasell has a 720,000 tonne/year capacity PP plant in Bayport, Texas, according to ICIS plants and projects.

By Michelle Klump