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

Non-recyclable items gumming up the works at recycling centers

August 21, 2014 3:46 pm ET

The influx of all sorts of unacceptable items at recycling centers has gotten to the point that Charlotte, N.C.-based ReCommunity is trying to bring...    More

Image

NanoHolding, Applied Nanotech merge to form PEN Inc.

August 21, 2014 4:44 pm ET

Nanotechnology firms NanoHolding Inc. and Applied Nanotech Holdings Inc. are merging to create PEN Inc., a publicly held firm whose product mix will...    More

Image

Investment firm specializes in emerging polymer firms in Ohio

August 21, 2014 3:20 pm ET

A plastics market veteran is working with an investment firm and a research foundation to help commercialize polymer technology in the Buckeye State.    More

Image

Bayer, SCAC partner on water reuse project

August 21, 2014 12:48 pm ET

Bayer MaterialScience (BMS) and Shanghai Chlor-Alkali Chemical Co. Ltd. (SCAC) have entered into a preliminary agreement for the reuse of waste water ...    More

Image

Report predicts growth for flexible packaging

August 21, 2014 12:34 pm ET

Flexible packaging in the United States grew last year and is expected to continue to grow this year, according to a new report by the Flexible Packag...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

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

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

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

More Events