North American polypropylene resin prices have increased by an average of 3 cents per pound since Oct. 1, driven in part by reduced production at a major PP plant operated by LyondellBasell Industries.
Houston-based LBI — the region's largest PP maker — declared force majeure on PP on Oct. 7, two days after a power outage hit the firm's plant in Bayport, Texas. Company officials declined to comment on the power outage or on the force majeure. The plant has annual production capacity of almost 1.6 billion pounds.
In an Oct. 7 letter to customers, LBI officials described the incident as “a site-wide power outage.” They added that officials “are currently evaluating the impact of this event on our polypropylene production capability” and that “the extent of the impact has not yet been fully defined.”
The outage — combined with strong domestic demand — has limited the availability of PP throughout North America. The PP market “isn't tight — it's outright short of resin,” a PP buyer in the Midwest U.S. told Plastics News.
The October increase reverses a trend that had seen regional PP prices fall for three straight months, and four times in the last five. Even with the increase, regional PP prices are down a net of 15 cents per pound so far in 2015. Much of that decrease occurred in January, when prices swooned by 10 cents.
The PP demand picture has been more positive, with North American sales up 5 percent through August. Domestic growth of 5.6 percent was lessened by an 11.5 percent drop in export sales during that eight-month period.
