Equistar declares force majeure on polyethylene

16-Jul-14

Along with Chevron Phillips Chemical Co., Equistar has declared force majeure production limits on polyethylene. Equistar — a unit of Houston-based LyondellBasell Industries — has experienced “significant feedstock supply disruptions” at its PE plants in Matagorda and Victoria, according to a July 9 letter to customers. Those two plants are massive PE production sites, with combined annual capacities of about 5.4 billion pounds of high, low and linear low density PE. LyondellBasell already had declared force majeure on ethylene feedstock made at its plant in La Porte, Texas, as per PlasticsNews. Market sources said the situations at Chevron Phillips and Equistar could tighten supply in a North American PE market where demand has been lackluster so far in 2014. But the outages also could prevent regional PE resin prices from falling in July, as some buyers had anticipated. Regional PE prices have not seen a decrease since late 2012. Since that point, five price increases have taken hold, leading major PE film extruders to take the rare step of trying to raise prices for their products even without an accompanying resin price increase.