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
Companies & Associations

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

Ford moving forward in carbon fiber for 'high volume' use

April 17, 2015 10:21 am ET

Ford Motor Co. has signed a deal with a carbon-fiber manufacturer to jointly explore “high-volume” automotive uses for the lightweight...    More

Image

Force majeure declared at six European sites since mid-March

April 17, 2015 1:10 pm ET

At least six European resin makers have declared force majeure on polyethylene, polypropylene and related products since mid-March, leading to higher ...    More

Image

Executives step down from Star Thermoplastics

April 17, 2015 12:56 pm ET

Executives Randall Fortin and Larry Johnson no longer are with materials firm Star Thermoplastics Alloys & Rubbers Inc.    More

Image

Zoltek expanding CF capacity in Europe

April 17, 2015 10:12 am ET

Leading carbon fiber group Zoltek Corp. has signed a strategic agreement with the Hungarian government to expand its operation in northern Hungary,...    More

Image

Hanwha Azdel adds capacity in Lynchburg

April 16, 2015 2:01 pm ET

Composite maker Hanwha Azdel Inc. will add space and a new production line at its Lynchburg, Va., production facility, the company announced April 16.    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

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

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

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

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events