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LyondellBasell keeps Carrington PP force majeure in place

LyondellBasell  has kept in place its declaration of force majeure on supplies of polypropylene (PP)

from the company’s 210,000 tonne/year plant at Carrington, UK, a LyondellBasell spokesperson confirmed on Monday.

However, the spokesperson was not able to provide any information regarding the status of the plant.

The plant was shut down over the weekend of 7-8 August, it was still not running on 16 August and there has been no update available since that date.

“We have been told that the plant is still down,” said a local buyer.

Another buyer said: “I had my suspicions when the lorry delivering our material had Polish number plates,” implying that its PP was being delivered from LyondellBasell’s alternative PP site at Plock, Poland.

While some producers continued to report a tight PP market in Europe, buyers reported that the situation has eased over the past few weeks.

“All this means is that the market is now balanced, as opposed to long,” said another buyer.

This sentiment was not confirmed by a major producer, however.

“We are still tight and have not given as much as €40/tonne ($51/tonne) away this month,” it said.

PP prices eased alongside the August propylene monomer price, which decreased by €38/tonne from July to €940/tonne FD (free delivered) NWE (northwest Europe).

Net homopolymer PP prices were trading at €1,200-1,250/tonne FD NWE, depending on grade and supplier.

PP buyers have been under heavy pressure to accept price increases throughout 2010, with year-to-date prices having risen by 30%.

Speculation was rife over when new capacities from the Middle East would have an impact on the market, but sources said they expect little change to occur in the short term.

“They should think they’re lucky to have got as far as they have this year so far,” said one observer, referring to producers’ margins in 2010. “We will see a change in quarter four.”

Buying sources said they were now hoping for a reduction in the September propylene contract price, which they expect to be transferred to the PP market.

But most monomer sources, while acknowledging that propylene monomer availability has eased, were not expecting a significant drop in September.

PP producers in Europe include LyondellBasell, Borealis, SABIC, Total Petrochemicals, Dow Chemical, Repsol, INEOS Olefins and Polymers, Polychim and Domo.


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