Feedstock availability tightened once more in August due to numerous unplanned outages at European cracker plants. Principal among these was the declaration of force majeure on supplies of ethylene from Shell's Moerdijk steam cracker in the Netherlands. The declaration stems from a lack of supply of feedstock naphtha to Moerdijk from Shell's Pernis refinery, also in the Netherlands, which suffered a fire in late July.
A summary of the latest supply-related developments is shown below:
• PET producer JBF Industries shut down its production facility in Geel, Belgium due to liquidity problems. In communication issued to customers on 7 August, the company stated that it assumes the standstill will only be short-lived and production will be restarted soon.
• Styrenics major Styrolution is expected to conduct maintenance works at one of its lines in Antwerp, Belgium, in the third quarter of this year, according to industry sources.
• LyondellBasell/Covestro's propylene oxide styrene/monomer unit underwent about five days of maintenance work at the beginning of August.
• At Total's site in Carling, France, production of LDPE grades for medical applications was shut down 12 August as decomposition had occurred in one of the reactors.
• After the fire in an acetylene production plant at the Marl Chemical Park in Germany 11 August, Ashland declared force majeure on 1,4-butanediol (BDO), tetrahydrofurane (THF) and formaldehyde.
• Shell Nederland hopes to put its Pernis refinery back into service in Rotterdam at the end of August. What is heard coming out of the Netherlands is that some plants have already restarted. However, for the petrochemical plants directly affected by the power outage on 30 July, the authorities seem to still not have given permission for a re-start. The force majeure for many materials, including propylene, will remain for the time being
• Effective 3 August, Shin-Etsu declared force majeure for supplies of its “K67” PVC grade from Rotterdam Shin-Etsu's PVC plant at Pernis in the Netherlands had to be shut down following the fire at the Shell refinery there.
Demand was better than would normally be expected during the peak of the holiday season. Many buyers sought additional material in anticipation of higher September notations.
Naphtha and spot monomer costs have strengthened in recent weeks due to firming demand and unplanned operational issues at several European crackers. September monomer contract prices seem set to rise. For example, market indicators suggest a €20-30/tonne increase in the September ethylene contract price.
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