Price and market trends: LyondellBasell’s high percentage of US force majeures

23 June 2014 00:00 Source:ICIS Chemical Business

Is LyondellBasell jinxed? Another force majeure issued by the company in June makes it an obvious question, since LyondellBasell already had the highest percentage of such declarations filed in the US this year, according to ICIS analysis.

American chemical producers have issued force majeures this year covering at least 23 plants, according to a survey by ICIS, with LyondellBasell accounting for more than half of the plants (14).

Nine of the producer’s US plants make polyethylene (PE), two polypropylene (PP), and one each for vinyl acetate monomer (VAM) and butadiene (BD).


LyondellBasell issued its latest force majeure, on acetic acid made at its La Porte, Texas plant, on 10 June, because of utilities and feedstock supply disruptions.

LyondellBasell said via email on 13 June that it does not comment on such operational matters. But the company’s broad explanation for its plight, related by CEO Jim Gallogly in an April conference call, is that the first quarter brought $300m worth of problems that had to be solved: plant maintenance, weather-related raw material costs and shipping delays.

“The first quarter was not on our normal pace,” Gallogly said.


Contracts cover abnormal occurrences through force majeure clauses. The term is French for “greater force” and covers unforeseen events – acts of God, as it were – such as the lightning strike that knocked out power at a LyondellBasell plant in France last July.

But the term’s meaning has been broadened to the point that a supply disruption or a compressor breakdown is now as majeure as a bolt of lightning. Numerous force majeures declared this year have cited equipment or mechanical failures.

By Lane Kelley