Feedstock issues causes Phillips 66 to reduce delivery of polypropylene

04-Jul-13

Phillips 66 will reduce delivery of polypropylene grades because of issues with feedstock supply, as per sources in Platts. Phillips 66 sources most of its feedstock polymer-grade propylene from its Bayway refining and petrochemical complex in Linden, New Jersey. The complex is scheduled to undergo a 45 day turnaround beginning October 1. The company had planned to build inventory for the turnaround using additional feedstock from Williams Partners. However, the Williams olefins plant at Geismar suffered an explosion and fire that resulted in disruption of production for an indefinite time. "While we are currently producing at full rates with our integrated monomer, this disruption of feedstock supply has forced us to restrict present deliveries," Phillips 66 said in its letter to customers. This move will further squeeze an already tight market. The measure by Phillips 66 comes as at least three major producers have announced contract price increases for either July or August. Last week, Garyville, Louisiana-based Pinnacle Polymers issued a force majeure declaration on polypropylene, citing feedstock supply issues that market sources said also resulted from the Williams disruption.