PE and PP plants shut on winter storm

Multiple polyethylene (PE) and polypropylene (PP) producers have shut plant operations as a result of the winter storm affecting much of the US, with several plants declaring force majeure.

A blast of Arctic air throughout much of the US resulted in below-freezing temperatures, equipment failures and widespread losses of power yesterday and today as power generators struggled to meet demand. Most of the power losses were in Texas, which is home to a large swath of petrochemical production facilities, among other major energy operations.

LyondellBasell informed customers it declared force majeure on PP output from its Gulf coast facilities because of the storm. The company said yesterday it is still evaluating the impact of the event on production and logistics capabilities and will inform customers later about product allocations. LyondellBasell has approximately 1.086mn t/yr of PP capacity at its plant in Bayport, Texas, and an additional 843,000t/yr of capacity at its Lake Charles, Louisiana, site. It was not immediately clear whether the Lake Charles plants were affected by the storm. The company declined to comment.

LyondellBasell also declared force majeure yesterday on PE output because of winter storm effects on its Gulf coast and Midwest plants. LyondellBasell has approximately 2.3mn t/yr of PE capacity at plants throughout Texas, including at Bayport, La Porte, Matagorda and Victoria. It has an additional 993,000t/yr of capacity at Midwest plants in Morris, Illinois, and Clinton, Iowa.

Ineos Olefins & Polymers declared force majeure on PP production. Ineos has approximately 586,000 t/yr of PP in Texas at plants in Chocolate Bayou, Texas, and Deer Park, Texas. The company also has PE production, but it was not immediately clear whether there were similar issues at PE sites.

Formosa Plastics yesterday said it has discontinued PE, PP and olefins operations at its Point Comfort, Texas, site as a result of severe weather conditions. The company said major raw material suppliers have also been affected by the weather and logistics partners also expected delays. The company is already operating under force majeure conditions on PE and PP as a result of earlier outages. Formosa Plastics has approximately 917,000 t/yr of PP capacity and 1.8mn t/yr of PE capacity at its Point Comfort, Texas site.

Flint Hills Resources yesterday declared force majeure on PP. Flint Hills Resources has approximately 344,000 t/yr of PP capacity at its plant in Longview, Texas.

Supplies for both PE and PP have been exceedingly tight since the beginning of the year amid planned and unplanned outages. The additional outages from the winter storm will keep supplies tight and will add further support to prices.

By Michelle Klump