Houston — Two companies with significant operations in Hurricane Laura-battered Lake Charles, Louisiana, declared force majeure on some products on Aug. 31 as widespread power outages, expected to be lengthy, hindered restart plans.
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Westlake Chemical declared FM on construction staple polyinyl chloride and upstream intermediate vinyl chloride monomer, while Sasol declared FM on polyethylene, including all grades of linear low PE and high density PE.
Those declarations were expected as those and other companies with operations in the path of the Category 4 storm's 150 mph winds continued assessing damage.
"At this time, we are not able to predict the duration of this force majeure condition," Westlake said in a customer letter obtained by S&P Global Platts. " This force majeure condition will cause supply disruptions and limit our ability to meet anticipated product demand."
A company spokeswoman on Aug. 31 reiterated Westlake's Aug. 27 statement that initial assessments showed its assets had incurred limited physical damage, but sources familiar with company operations said additional assessments revealed wind damage.
Sasol said in a customer letter also obtained by Platts that many of its employees and contractors followed mandatory evacuation orders imposed in Lake Charles before the storm came ashore Aug. 27 and that damage and its impact on a restart schedule were being assessed.
Overall, about 19% of 40 million mt/year of US ethylene production capacity remained offline on Aug. 31. Another 10% that had been shut ahead of the storm's landfall had restarted or was in the process of restarting.
Here are operations and pricing effects of Hurricane Laura's aftermath:
**Sasol: FM declared Aug. 31 on all North American polyethylene, including all LLDPE and HDPE grades.
**Westlake Chemical: FM declared on Aug. 31 on all North American PVC and VCM.
**INEOS Olefins & Polymers USA: FM declared Aug. 26 on HDPE at 460,000 mt/year unit in La Porte, Texas; plant is a joint venture with Sasol.
**Formosa Plastics USA: FM declared Aug. 14 on PVC at its 798,000 mt/year Point Comfort, Texas, and 513,000 mt/year Baton Rouge, Louisiana, plants; unrelated to Hurricane Laura.
**Sasol: 1.5 million mt/year and 439,000 mt/year crackers; 470,000 mt/year LLDPE; 380,000 mt/year ethylene oxide/monoethylene glycol; a new 420,000 mt/year LDPE plant slated to start up in September. Assessing damage; restart pending availability of power.
**Westlake Chemical: three chlor-alkali plants, combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda; two vinyl chloride monomer plants, combined capacity of 952,543 mt/year; two crackers, combined capacity of 1.19 million mt/year; 200,000 mt/year LLDPE; 60,000 mt/year HDPE/LLDPE; 386,000 mt/year LDPE; 258,547 mt/year styrene. Assessing damage; restart pending availability of power.
**Lotte Chemical: 1 million mt/year joint-venture cracker; 700,000 mt/year MEG plant. Assessing damage; awaiting restart pending availability of power.
**LyondellBasell: 400,000 mt/year and 1 million mt/year PP plants. Assessing damage; awaiting restart pending damage assessment and availability of power.
**Dow Chemical: 882,000 mt/year cracker; 236,000 mt/year LDPE; no major damage found, awaiting restart pending restoration of external infrastructure, including power.
**CP Chem: 420,000 mt/year HDPE; limited visible damage found, assessment continuing, awaiting restart pending restoration of power.
Port Neches, Texas
**Indorama Ventures: 235,867 mt/year cracker; 1 million mt/year EO/MEG; 238,135 mt/year propylene oxide; 988,000 mt/year MTBE. Minimal damage assessed, awaiting restart pending restoration of power.
Port Arthur, Texas
**CP Chem: 855,000 mt/year cracker; limited visible damage found, assessments continuing; awaiting restart pending restoration of power.
**ExxonMobil: 826,000 mt/year cracker; 650,000 mt/year and 325,000 mt/year LLDPE; 225,000 mt/year HDPE; 220,000 mt/year HDPE/LLDPE; minor repairs needed, restarts had begun Aug. 28.
Port Arthur, Texas
**Total/BASF: joint-venture 1 million mt/year cracker, was shut for maintenance pre-Hurricane Laura.
**Motiva Enterprises: 635,000 mt/year cracker; restart began Aug. 27, flaring expected to last through Sept. 1, per regulatory filing.
**CP Chem: Three HDPE units, combined capacity of 998,000 mt/year; working to resume normal operations.
**TPC Group: 544,000 mt/year butadiene; restart to begin Aug. 29.
**Fairway Methanol: 1.3 million mt/year Fairway methanol facility in Clear Lake shut Aug. 26, restarting Aug. 28.
**CP Chem: 1.7 million mt/year and 837,000 mt/year crackers; working to resume normal operations.
**ExxonMobil: reducing rates at 1.25 million mt/year, 962,000 mt/year and 1.59 mt/year crackers; resuming normal rates on Aug. 28.
**INEOS Styrolution: 779,000 mt/year styrene monomer. Restarting Aug. 31, per company notice on community hotline.
**LyondellBasell: 1.16 million mt/year, 455,000 mt/year, 235,000 mt/year PP; restarted Aug. 28.
**Baystar: 400,000 mt/year joint-venture HDPE; assessing damage, restarting Aug. 28.
**LyondellBasell: 180,000 mt/year HDPE; restart began Aug. 29-30.
**US spot ethylene inched up 0.75 cent on Aug. 31 from a 10-month high of 23.25 cents/lb reached Aug. 25 as 19% of US ethylene capacity remained offline.
**US export HDPE prices rose $11-$44/mt on the week Aug. 26, depending on the grade, as producers prepared for the storm and INEOS Olefins & Polymers USA declared force majeure on HDPE at its La Porte, Texas, site; prices were flat Aug. 31 despite Sasol's FM on PE as the market gauges availability amid continued damage assessments.
**Export PVC prices were flat as the market awaited September offers after Westlake Chemical declared force majeure on PVC and VCM on Aug. 31.
**US spot homopolymer polypropylene prices rose 1 cent on the day Aug. 27 amid tight supply, driven in part by hurricane-related shutdowns, and held steady Aug. 31.
PORTS AND RAILROADS
**Houston Ship Channel: Closed Aug. 26, reopened Aug. 27.
**Sabine-Neches Waterway, channel closed Aug. 26; on Aug. 31 parts open with restrictions.
**Port of Lake Charles closed Aug. 25, remained closed Aug. 31 pending damage assessments.
**Union Pacific: Assessing southeast Texas and southwest Louisiana network; As of Aug 30, service restored to affected line segments in southwest Louisiana except one linking Lake Charles, Louisiana, to Beaumont, Texas; customers with rail shipments moving through the impacted area should expect a minimum of 72 hours of additional transit time.