LyondellBasell declares force majeure from Matagorda, Texas PE plant

HOUSTON (ICIS)—LyondellBasell has declared a force majeure on polyethylene (PE) production from its Matagorda, Texas, facility, according to a customer letter obtained by ICIS on Friday.

According to the letter, LyondellBasell suspended production at the Matagorda site due to combination of equipment failure and severe winter weather on the US Gulf Coast.

LyondellBasell’s Matagorda facility can produce 871,000 tonnes/year of high density polyethylene (HDPE).

Several producers have separately announced price increases of 4 cents/lb ($88/tonne) effective as of 1 February or as contracts allow.  Recent production issues in the US Gulf may provide some additional support to sellers’ price increase initiatives.

Buyers, however, may offer resistance as they had entered the new year hoping to scale back the significant price increases seen after Hurricane Harvey, pointing to the significant rise in US capacity stemming from new plant start ups in the fourth quarter of 2017.

ICIS assessed December contracts for LLDPE butene (c4) film at 81-83 cents/lb, high density polyethylene (HDPE) blow moulding at 81-83 cents/lb and low density polyethylene (LDPE) liner grade at 89-91 cents/lb, all on a delivered US in bulk basis.

Image above: These are PE pellets. Photo by Al Greenwood