Chevron Phillips Chemical declares force majeure on polyethylene supply

15-Jul-14

Chevron Phillips Chemical has declared a force majeure on polyethylene supply, as per Platts. The move comes a week after a fire at the company's Port Arthur plant injured two workers and caused a steam cracker offline. Chevron Phillips Chemical told customers the shutdown was affecting its ability to supply ethylene and it was declaring a "contingency on all ethylene sales." No timetable has been announced for a restart of the 830,000 mt/year steam cracker. The company said in Monday's letter that it was still in the process of evaluating how long any polyethylene allocations would last. The US PE market has already been talked tight in recent weeks, with multiple production and supply issues from several producers said to be limiting product availability. Fellow US producer Equistar last week declared a force majeure for polyethylene from its Matagorda and Victoria, Texas, plants, citing feedstock supply disruptions. Multiple industry sources have said the issues would likely result in flat domestic contract settlements for July, despite some calls from buyers for decreases earlier in the month.