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Latest Force Majeure Announcement Joins Long List of Others
June 21, 2021

LyondellBasell declared force majeure (FM) on Linear Low-Density Polyethylene (LLDPE) at its La Porte Texas facility following a Q1 reactor equipment failure.

In a letter to its customers obtained on Thursday, LyondellBasell said the equipment failure was beyond its reasonable control, and accordingly, it must declare the force majeure for LLDPE coming off the asset immediately.

The notice comes after the company lifted its FM on all Polyethylene compounds in April, according to market participants. It also lifted FM on all products, except at its Chocolate Bayou, Matagorda, and La Porte facilities. The La Porte facility produces Ethylene, Propylene, Low-Density Polyethylene, and LLDPE. LyondellBasell also produces HDPE from its La Porte Hyperzone PE plant that came online in 2020.

LyondellBasell did not give a timeline for how long the force majeure would be in place but said it is evaluating the impact on production and logistics capability and would provide additional information once it assesses supply capabilities.

This latest FM adds further strain on an already tight resin market. Trade sources have also said any impact to the market, large or small, would likely send prices higher. Approximately 20 North American producers have resin FMs or sales allocations in place.

LyondellBasell's FM came the same day TotalEnergies said all production lines at its La Porte plant were back up as it moves towards a return to a normal supply position. TotalEnergies declared FM on Polypropylene production at La Porte due to freezing temperatures in Texas back in February.

In a letter to its customers, TotalEnergies said it would be able to determine when it can lift its FM within the next few weeks but would need additional time to rebuild inventories to reasonable levels.

By Brian Balboa for The Plastics Exchange


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