17 May 2021 | 19:10 UTC

Westlake lifts US PVC force majeure: letter

Highlights

Force majeure lifted for PVC, VCM

Overall US PVC supply seen tight

Westlake Chemical has lifted its force majeure on US polyvinyl chloride and upstream vinyl chloride monomer, the company announced in a customer letter dated May 17 and seen by S&P Global Platts.

The letter said the company was "formally lifting the systemwide force majeure condition for PVC and VCM manufactured and shipped from its North American operations that was originally declared on Feb. 19" as a result of mid-February's deep freeze that "resulted in a shutdown/curtailment of our plant operations."

The winter storm brought sustained subfreezing temperatures to the US Gulf Coast and much of the US, forcing widespread petrochemical shutdowns that included at least 57% of US PVC capacity.

PVC is a construction staple used to make pipes, window frames, vinyl siding and other products. VCM is its immediate precursor.

US PVC supply was already tight in early 2021 as Westlake recovered from two 2020 hurricanes that hit its Lake Charles, Louisiana, operations, and Formosa Plastics USA emerged from operational issues that squeezed output.

The freeze further tightened supply, pushing export prices to $1,800/mt FAS Houston in late March, the highest level since S&P Global Platts began assessing the market in 1983. Prices have since retreated $50/mt and were last assessed May 12 at $1,750/mt FAS.

Domestic PVC prices also reached 85-87 cents/lb ($1,874-$1,918/mt) at the end of April, the highest level since Platts began assessing that market in 2001, reflecting 39 cents/lb in price increases accepted since June 2020.

Producers have worked to clear order backlogs and restock inventories since the freeze hit. Force majeures declared the week of Feb. 15 by OxyChem, the chemical division of Occidental Petroleum, and Formosa Plastics USA remained in effect May 17.


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