Formosa Plastics Corp. USA has placed force majeure sales limits on PVC resin made at its plants in Texas and Louisiana.
According to a media report, officials with Formosa in Livingston, N.J., said that the force majeure declaration resulted from difficulties making PVC because of upstream steam cracker problems. Formosa makes PVC in Point Comfort, Texas, and Baton Rouge, La.
Formosa's challenges in Point Comfort could tighten PVC supplies in North America. North American PVC sales in recent months have recovered from early-year weakness from the COVID-19 pandemic.
Higher demand has played a role in regional prices for the material increasing by a total of 5 cents per pound in June and July. Formosa's current situation could increase the chances of a 3-cent increase nominated for August taking hold.
Recent PVC demand has been strong from the home renovation market. Construction-related uses account for around 60 percent of PVC consumption in the U.S. and Canada. A market source told Plastics News that PVC makers in July had reduced inventory levels to just over seven days — a relatively low level — which has tightened supply and allowed prices to climb higher.
It's the second time this month that Formosa has experienced production challenges in Point Comfort. Earlier, the firm placed force majeure sales limits on polypropylene resin made there. An Aug. 8 letter to customers cited "unexpected operational difficulties" at a PP unit.