Phillips 66 limiting polypropylene deliveries

By Frank Esposito
Senior Staff Reporter

Published: July 2, 2013 3:08 pm ET
Updated: July 2, 2013 4:37 pm ET

Related to this story

Topics Materials, Resin Pricing, Materials Suppliers

An already-tight North American polypropylene market has taken one step forward, but two steps back.

Just as Formosa Plastics Corp. USA has exited force majeure conditions for PP at its plant in Point Comfort, Texas, PP maker Pinnacle Polymers has reported production problems at its PP plant in Garyville, La., and Phillips 66 is having problems sourcing propylene feedstock for its PP plant in Linden, N.J.

Livingston, N.J.-based Formosa had been operating under force majeure for less than a month. In a June 11 letter to customers, polyolefins vice president and general manager Ken Mounger said that the firm’s PP units in Point Comfort “have experienced unplanned outages” and was declaring force majeure as a result. No details were provided as to the reasons for the outages.

Garyville-based Pinnacle declared force majeure in late June. Declaring force majeure “will impact our ability to fulfill orders,” Pinnacle President Mark Knorr said in a June 24 letter to customers.

The situation “is the result of an interruption in the normal supply of [propylene] monomer to our plant from multiple sources,” he added. “We are unable to calculate the impact of this interruption at this time.” Pinnacle operates about 800 million pounds of annual PP capacity at its plant.

In Linden, the fatal explosion that closed Williams Cos.’ olefins plant in Geismar, La., now has led Phillips 66 to limit deliveries of polypropylene resin from its PP plant.

In a July 1 letter to customers, Phillips 66 PP and marketing director Greg Osterholt said that his Houston-based firm “is compelled to reduce deliveries of [PP] product at this time.” The firm also will “apportion the material we have available to our customers in a fair and reasonable manner” in order to build inventory in advance of a planned maintenance turnaround. The 45-day turnaround was set to begin on Oct. 1.

Two workers were killed and 76 injured in the June 13 explosion at the Geismar plant operated by Tulsa, Okla.-based Williams. The plant remains closed, and no cause of the explosion has been identified. The plant’s main product was ethylene, with annual capacity of almost 1.4 billion pounds. But it also had annual capacity of 90 million pounds of propylene.

In a June 24 news release, Williams officials said that the explosion originated in the propylene fractionator area of the plant. Several pieces of equipment in the area just adjacent to the propylene fractionator have been seriously damaged and will likely need to be replaced, they added.

Officials also said that “significant amounts” of the electrical power cable and control wiring in the plant will need to be replaced.

The plant was “the principal additional source of [propylene] feedstock for Phillips 66’s Linden site, which is known as the Bayway plant. The plant has annual capacity of about 800 million pounds of PP.

The silver lining to the current PP outages — although PP makers might not agree — is the fact that PP demand in the U.S. and Canada has been soft in early 2013. Through April, demand was down more than 5 percent vs. the same period in 2012, according to the American Chemistry Council in Washington. Stronger demand would have worsened the effects of the outages seen by Formosa, Pinnacle and Phillips 66.


Comments

Phillips 66 limiting polypropylene deliveries

By Frank Esposito
Senior Staff Reporter

Published: July 2, 2013 3:08 pm ET
Updated: July 2, 2013 4:37 pm ET

Post Your Comments


Back to story


More stories

Image

A. Schulman reports growth in sales and profit

October 22, 2014 7:58 pm ET

Executives with materials maker A. Schulman Inc. have to be smiling after seeing full results for the firm's 2014 fiscal year.    More

Image

PolyOne takes on LED lighting

October 22, 2014 4:23 pm ET

PolyOne Corp. is making inroads into LED lighting applications with its Therma-Tech-brand material technology.    More

Image

Bergen International adds manufacturing space, extrusion line

October 22, 2014 3:42 pm ET

Chemical foaming agent manufacturer Bergen International LLC recently doubled its manufacturing capacity, added an extrusion line and laboratory...    More

Image

DuPont materials taking more ground in auto, medical, electronics

October 22, 2014 2:41 pm ET

Materials made by DuPont Co. are making inroads with products ranging from auto coolant pipes to circuit breakers to surgical devices.    More

Image

Materials companies introduce a range of new products at Fakuma

October 22, 2014 11:29 am ET

DuPont Co. led a parade of materials firms with new products at Fakuma 2014.    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events