Chevron Phillips, Equistar declare force majeure limits on polyethylene

By Frank Esposito
Senior Staff Reporter

Published: July 15, 2014 4:46 pm ET
Updated: July 17, 2014 8:32 pm ET

Image By: Chevron Phillips Chemical Co. Chevron Phillips Chemical Co.'s operation at Port Arthur, Texas.

Related to this story

Topics Materials, Materials Suppliers, United States
Companies & Associations Chevron Phillips Chemical Co. LP

UPDATED — Polyethylene makers Chevron Phillips Chemical Co. and Equistar have declared force majeure production limits on that material after incidents at their Texas plants — including a July 7 fire that injured two workers at a Chevron Phillips ethylene/propylene unit in Port Arthur.

No cause for the fire was given in a July 9 statement from Chevron Phillips, which is based in The Woodlands, Texas. The statement added that the injured workers remained hospitalized. The Port Arthur plant has almost 1.8 billion pounds of annual ethylene capacity and 1.1 billion pounds of annual propylene capacity.

In the release, officials said that reviews are underway to determine when the unaffected areas of the plant can be restarted, and that no timetable has been set for restart of the area affected by the incident.

Equistar — a unit of Houston-based LyondellBasell Industries — has experienced “significant feedstock supply disruptions” at its PE plants in Matagorda and Victoria, according to a July 9 letter to customers. Those two plants are massive PE production sites, with combined annual capacities of about 5.4 billion pounds of high, low and linear low density PE.

LyondellBasell already had declared force majeure on ethylene feedstock made at its plant in La Porte, Texas. A LyondellBasell spokeswoman said the firm does not comment on operational matters.

Market sources said the situations at Chevron Phillips and Equistar could tighten supply in a North American PE market where demand has been lackluster so far in 2014. But the outages also could prevent regional PE resin prices from falling in July, as some buyers had anticipated.

“Any time you have outages like this, it’s possible that markets could get tighter,” said Phil Karig, managing director of the Mathelin Bay Associates consulting firm in St. Louis. “But a lot of [PE] price increases tend to start up in the spring. Increases you see in the market this time of year tend to be more defensive-type price increases.”

Markets for PE — and for HDPE in particular — already were tight, and are likely to get tighter because of the outages, according to Mike Burns, a PE market analyst with Resin Technology Inc. in Fort Worth, Texas.

“The contract [PE buyers] will get what they need, but the secondary market won’t be able to get material,” he said. Burns added that he wouldn’t be surprised if regional PE makers try to raise prices in September. Producers “still haven’t reached the breaking point” for PE prices, he said.

Regional PE prices have not seen a decrease since late 2012. Since that point, five price increases have taken hold, leading major PE film extruders to take the rare step of trying to raise prices for their products even without an accompanying resin price increase.


Comments

Chevron Phillips, Equistar declare force majeure limits on polyethylene

By Frank Esposito
Senior Staff Reporter

Published: July 15, 2014 4:46 pm ET
Updated: July 17, 2014 8:32 pm ET

Post Your Comments


Back to story


More stories

Image

Prices trending up for some recycled resins

July 24, 2014 1:27 pm ET

Plastics News is correcting prices for recycled grades of several commodity resins on this week's resin pricing chart.    More

Image

Chinese auto suppliers growing in US

July 24, 2014 4:17 pm ET

Two China-based automotive suppliers are expanding in the U.S., according to information released by the Michigan Economic Development Corp.    More

Image

Rail improvements also allow rotomolder to improve operations

July 24, 2014 3:10 pm ET

An infrastructure improvement grant from the U.S. Commerce Department is helping an Indiana plastics plant expand its product line and add jobs.    More

Meredian merging with Danimer Scientific

July 24, 2014 1:59 pm ET

Bioplastics maker Meredian Inc. is merging with its sister firm, Danimer Scientific LLC.    More

Image

US Bioplastics receives funding to bring Gatoresin to the market

July 24, 2014 1:44 pm ET

Materials maker U.S. Bioplastics is hoping its Gatoresin product will take a bite out of the bioplastics market, thanks to funding from a state agency...    More

Market Reports

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Plastics Recycling Market Review & Outlook 2014

This special report from Plastics News examines the North American plastics recycling industry and provides insight into indicators that impact market viability, including Resin pricing trends for virgin and recycled market material and historical Resin production trends for post- consumer and industrial waste.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

More Events