Multiple petrochemical producers declare force majeure on deep freeze fallout

Houston — Sub-zero temperatures across the US Gulf Coast prompted several petrochemical producers to declare force majeure on some products, according to customer letters seen by S&P Global Platts.

Arctic cold reached the coastline on Feb. 14, pushing temperatures below freezing for the first time in more than a century. Numerous petrochemical plants reported flaring on upsets and shutdowns as freezing rain turned to ice with no relief expected until the afternoon of Feb. 16.

LyondellBasell and INEOS Olefins and Polymers USA each declared force majeure on US polypropylene effective immediately, according to customer letters dated Feb. 15.

"We regret to inform you that our Gulf Coast facilities are being adversely impacted by the winter storm that is currently affecting much of the United States," LyondellBasell's letter said. "This adverse weather event is beyond our reasonable control and we must declare a force majeure event for polypropylene, effective immediately."

LyondellBasell operates three PP plants at its Bayport site near the mouth of the Houston Ship Channel with a cumulative capacity of 1.85 million mt/year, and two units in Lake Charles, Louisiana, with a cumulative capacity of 1.4 million mt/year.

INEOS' letter said the freezing weather "significantly affected" the company's Texas-based polymer facilities, prompting the force majeure declaration for PP as a precautionary measure.

INEOS has three Texas PP plants with a cumulative capacity of 1.29 million mt/year.

Export PP prices already at all-time highs

US export homopolymer injection PP prices were last assessed Feb. 12 at $2,491/mt FAS Houston, while co-polymer was last assessed Feb. 10 at $2,557/mt FAS, both all-time highs, according to S&P Global Platts data.

Export PP volumes have been largely unavailable for several months amid tight supply, and the force majeures were expected to elevate prices further.

Polypropylene is used to make plastics used in vehicles, appliances and for butter and yogurt tubs.

OQ Chemicals, formerly known as Oxea, on Feb. 15 also declared force majeure on oxo alcohols, aldehydes, acids and esters produced at its Bay City, Texas, operations, the company announced.

"Due to severe weather affecting the Texas Gulf Coast area and its terminals, barging, and shipping facilities, as well as OQ Chemical's plant operations, OQ Chemicals Corporation has been forced to temporarily shut down its Bay City, Texas plant site," the company said.

The Bay City site has 240,000 mt/year of capacity for isobutanol and normal butanol; 250,000 mt/year of normal propanol; and 120,000 mt/year of butyl acetate. Butanols are used as additives in varnishes and paint, while butyl acetate is a solvent.

Formosa Plastics USA on Feb. 13 began shutting down its entire Point Comfort, Texas, complex, which includes three crackers with a cumulative capacity of 2.76 million mt/year; 1.74 million mt/year in polyethylene capacity; a 798,000 mt/year polyvinyl chloride plant; a 753,000 mt/year vinyl chloride monomer unit; a 1.478 million mt/year ethylene dichloride unit; and a chlor-alkali plant that can produce up to 910,000 mt/year of chlorine and 1 million mt/year of caustic soda.

In a customer letter dated Feb. 15 about the shutdown, Formosa said detailed inspections "will occur only when it is deemed safe to start those assessments," and logistics partners in the Pacific Northwest, Midwest and along the Gulf Coast had announced a minimum of 48-hour delays.

ExxonMobil also confirmed Feb. 16 that the company had shut all refining and chemical operations at its Baytown and Beaumont, Texas, complexes.

"Due to freezing weather conditions, coupled with the curtailment of natural gas supplies throughout the state of Texas, ExxonMobil has safely shut down its Beaumont and Baytown area facilities," spokeswoman Sarah Nordin said in an email.

ExonMobil's Baytown site includes three crackers with a cumulative 3.79 million mt/year of capacity. The Beaumont complex has 1.66 million mt/year of polyethylene capacity and a 826,000 mt/year cracker.