Formosa declares force majeure on US PE, PP after Texas outage

HOUSTON (ICIS)–Formosa Plastics has declared force majeure for all polyethylene (PE) and polypropylene (PP) products, following a power outage that occurred earlier in the week at its Point Comfort site in Texas, the company said in a letter obtained on Wednesday.

In a letter to customers dated 27 June, Formosa said the outage at its utilities co-generation unit was likely caused by inclement weather, prompting “excuse of performance” and the force majeure declaration.

Market sources said Formosa planned on restarting the complex over the long 4 July holiday weekend, but a source close to the company said on Wednesday that some units affected by the shutdown were already restarting.

Three polymer units at Point Comfort – one train of PE, two of PP and the polyvinylchloride (PVC) plant – are restarting but at reduced capacity, the source said.

The producer plans to get the 1.5m tonne/year ethylene cracker restarted over the long weekend, the source added.

A market source said the chlor-alkali, ethylene dichloride (EDC) and vinylchloride monomer (VCM) plants are now running.

Besides the cracker, Formosa’s Point Comfort complex includes 270,000 tonne/year of propylene; 650,000 tonne/year for high-density polyethylene (HDPE); 300,000 tonne/year for monotheylene glycol (MEG); 910,000 tonnes/year of chlorine and 1m tonne/year of caustic soda, among other chemicals, according to the ICIS plants and projects database.

Additional reporting by Bill Bowen