Formosa Plastics USA lifts February force majeure on PVC: letter

Formosa Plastics USA lifted July 6 its force majeure declared mid-February on construction staple polyvinyl chloride, according to a customer letter seen by S&P Global Platts.

The letter said that effective July 6 Formosa was rescinding its force majeure on suspension-grade PVC — the type used to make pipes, window frames, vinyl siding, and other products.

Formosa's force majeure declared June 7 on specialty PVC remained in effect July 6.

The company did not respond to a request for comment.

The suspension-grade force majeure was the last for that type of PVC to be lifted after a deep freeze hit the US Gulf Coast and much of the US in mid-February, forcing widespread weeks-long petrochemical plant shutdowns.

OxyChem, the chemical division of Occidental Petroleum, lifted June 28 its freeze-related force majeure on suspension-grade PVC and upstream vinyl chloride monomer, and Westlake Chemical lifted June 1 its force majeure on those two products announced the week of the freeze.

Shintech, the fourth US PVC producer, did not declare force majeure on products during the freeze.

Market sources said US PVC supply remains tight, as does that of upstream chlorine, which is the first link in the PVC production chain. However, the liftings of the force majeure events indicate producers can fulfill contractual obligations, which was seen as a step toward increasing PVC volume availability, particularly for exports.

PVC demand has been strong since June 2020 amid a US housing construction boom fueled by consumers seeking more space while working from home amid the coronavirus pandemic. That pull from the domestic market has reduced export volume availability, sources said.

Two hurricanes that hit Louisiana in August and October 2020 siphoned supply availability, and the February freeze further reduced output, leaving inventories depleted, sources said. Producers have worked to restock while chasing demand once plants restarted in March after the freeze.

Formosa's force majeure on specialty PVC was declared after a fire ignited in a dryer at that unit at the company's Point Comfort, Texas, complex. That fire did not affect other units at the complex.

Specialty dispersion PVC is used to make vinyl flooring, traffic cones, carpet backing, and conveyor belts.