Westlake Chemical declared force majeure on polyvinyl chloride (PVC) and upstream vinyl chloride monomer (VCM) in the aftermath of Hurricane Ida.
Westlake has approximately 1.168mn t/yr of PVC capacity combined at two plants in Geismar and Plaquemine, Louisiana, both of which remain shut following the storm, which came ashore near Port Fourchon, Louisiana, on 29 August.
Westlake said its plant facilities incurred limited physical damage from the storm, but operations cannot restart until power and industrial gas supply is restored.
Approximately 39pc of total US PVC capacity is believed to be off line as a result of the storm, including Westlake's plants, as well as Shintech, with 1.49mn t/yr of combined capacity at its Addis and Plaquemine, Louisiana sites, and Formosa, with 500,000 t/yr of capacity at its Baton Rouge, Louisiana site. Market participants said Shintech declared force majeure on upstream caustic soda, but not on PVC so far.
Market participants estimated that power and industrial gases would be restored by sometime next week, after which companies can do a more full assessment of damage to their plants.
The PVC market was already tight before the storm on strong demand from the domestic construction market and earlier supply constraints. The extended outages are expected to cause prices to rise significantly.
Producers have offered indications that the next export price level will be around $1,850/t fas Houston once volumes are available. That is an 11pc jump from where prices were assessed at the end of last week.
