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LyondellBasell, INEOS declare force majeure on polypropylene

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Houston-According to customer letters seen by Standard & Poor's Global Platts, the temperature on the U.S. Gulf Coast is below zero, prompting several petrochemical manufacturers to declare force majeure for certain products.

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The Arctic cold reached the coastline on February 14, dropping temperatures below freezing for the first time in more than a century. Many petrochemical plants report that due to freezing rain turning into ice, no relief and work stoppages are expected before the afternoon of February 16.

According to the customer letter dated February 15th, LyondellBasell and INEOS Olefins and Polymers USA both declared force majeure for US polypropylene to take effect immediately.

"We regret to inform you that our facilities along the Gulf of Mexico are being adversely affected by the winter storms currently affecting most of the United States," LyondellBasell said in the letter. "This severe weather event is beyond our reasonable control. We must declare a force majeure event in polypropylene and take effect immediately."

LyondellBasell operates three PP plants at its Bayport plant near the Houston waterway with a cumulative production capacity of 1.85 million tons per year, and two plants in Lake Charles, Louisiana, with a cumulative production capacity of 1.4 million tons per year.

The INEOS letter stated that the cold weather "seriously affected" the company's polymer facility in Texas, prompting PP to declare force majeure as a preventive measure.

Ineos owns 3 Texas PP plants with a cumulative production capacity of 1.29 million tons per year.

Export PP price has hit a record high

According to data from S&P Global Platts, the US export homopolymer injection PP price was last estimated to be US$2,491/ton FAS Houston on February 12, while the copolymer price was last estimated in February. On the 10th, it was US$2,557/ton FAS, both hitting record highs.

Under the situation of tight supply, PP export volume has been basically unavailable for several consecutive months, and it is expected that force majeure will further push up prices.

Polypropylene is used to make plastic used in vehicles, appliances, and butter and yogurt barrels.

The company announced that OQ Chemicals, formerly known as Oxea, also announced on February 15 that the oxo alcohols, aldehydes, acids and esters produced at its Bay City plant in Texas have encountered force majeure.

"Due to severe weather affecting the Texas Gulf Coast and its terminals, barges and transportation facilities, as well as OQ Chemical's factory operations, OQ Chemicals Corporation was forced to temporarily close its Bay City, Texas factory." The company said.

The Beicheng plant has 240,000 metric tons/year of isobutanol and n-butanol production capacity; 250,000 metric tons/year of n-propanol; and 120,000 metric tons/year of butyl acetate. Butanol is used as an additive in varnishes and paints, while butyl acetate is a solvent.

Formosa Plastics Corporation of America began to close its entire Point Comfort complex in Texas on February 13th, including three crackers with a cumulative production capacity of 2.76 million tons/year; polyethylene production capacity of 1.74 million tons/year; 798,000 metric tons/year PVC plant; a 753,000 metric tons/year vinyl chloride monomer plant; 1.478 million tons/year ethylene dichloride plant; and a chlor-alkali plant that can produce up to 910,000 metric tons/year of chlorine and 1 million Tons/year of caustic soda.

In a customer letter dated February 15 regarding the shutdown, Formosa stated that “detailed inspections will only be carried out if it is deemed safe to initiate these assessments.” Logistics in the Pacific Northwest, Midwest, and Gulf Coast The partner has announced a delay of at least 48 hours.

Exxon Mobil also confirmed on February 16 that the company has closed all its refining and chemical operations in Baytown and Beaumont, Texas.

Spokesperson Sarah Noordin said in an email: "Due to cold weather conditions and a reduction in natural gas supply in Texas, ExxonMobil has safely closed its Beaumont and Baytown facilities. "

ExonMobil's Baytown site includes three crackers with a cumulative production capacity of 3.79 million tons per year. The Beaumont complex has a polyethylene production capacity of 1.66 million tons/year and a cracking unit of 826,000 tons/year.

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