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Petrochemicals

Westlake Polymers declares force majeure on Lake Charles' polymer units

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Westlake Polymers declares force majeure on Lake Charles' polymer units

Highlights

Restart timing to be shared with customers in coming days

Lake Charles facility's total PE capacity 646,000 mt/year

Houston — Westlake Polymers declared force majeure on its North American polymer facilities Aug. 31 after Hurricane Laura adversely impacted its unit sites, the company said in a letter seen by S&P Global Platts.

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Additionally, Westlake's Lake Charles, Louisiana, complex had "incurred limited physical damage" and restarts would primarily depend on the availability of electric power, industrial gases, and other feedstocks, according to an official statement Aug. 27 that spokeswoman Erika Soechting shared with Platts on Sept. 1.

The company also declared the force majeure as a result of the hurricane and associated uncertainty, the letter stated.

"Westlake has begun assessing its facility conditions and associated supply and distribution issues," the letter said.

There will be a better assessment of the damage and potential restart timing in the forthcoming days and any potential impacts on their sales, the letter added.

Westlake's facility at Lake Charles, Louisiana, has a 200,000 mt/year LLDPE unit; a 60,000 mt/year HDPE /LLDPE unit; a 386,000 mt/year LDPE plant.

The letter joins a list of force majeures declared in the week of Aug. 30 by petrochemical producers, including INEOS Olefins & Polymers and Sasol, recovering from widespread power outages and damage from Hurricane Laura, which made landfall Aug. 27.

In turn, market participants expect September to be very challenging as offers grow tight due to limited availability from producers facing shutdowns.

"I won't be surprised if export offers are significantly less. Ineos and Sasol have already declared force majeure and several others are facing production issues," one trader source said.

Westlake Chemical also declared a force majeure on Aug. 31 for all its North American PVC and VCM. Westlake's shutdown of its Lake Charles complex has idled 38% of its US VCM production, resulting in two VCM plants with a combined capacity of 952,318 mt/year going offline.

The complex also has three upstream chlor-alkali plants with a combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda — 46% of the company's overall North American chlor-alkali capacity.

On Aug. 31, Platts last assessed all three of the daily US PE spot export pricing flat on the day with HDPE blowmolding pricing at $904-$926/mt (41-42 cents/lb), LDPE at $1,003-$1,025/mt (45.5-46.5 cents/lb), and LLDPE butene at $827-$849/mt (37.5-38.5 cents/lb), all FAS Houston basis.