Lotte Chemical declares force majeure on US MEG after storm

Lotte Chemical declared force majeure May 22 on monoethylene glycol and other products produced at its Louisiana complex after an electrical equipment failure, according to a customer letter seen by S&P Global Platts on May 27.

The letter said the company prepared for heavy storms that hit Lake Charles and other areas along the Texas and Louisiana coasts the week of May 17, but on May 21, "critical electrical equipment" failed and prompted an unexpected plant shutdown.

The letter said further that initial assessments showed that torrential rain caused the failure, which severed electricity supply to critical process equipment.

Lotte operates a 700,000 mt/year MEG plant in Lake Charles that started up in January 2019. The force majeure declaration affects MEG, diethylene glycol (DEG) and triethylene glycol (TEG) production at the Lake Charles site, the letter said.

Market sources said Lotte was expected to restart its operations by May 31. The swift force majeure declaration indicated the company had limited MEG/DEG/TEG stocks when the shutdown occurred.

"They didn't have a big supply built up," a source noted.

Lotte did not respond to a request for comment.

MEG is used as antifreeze and is a feedstock for polyethylene terephthalate, which is used to make plastic bottles and polyester fabric.