Chevron Phillips Chemical declared a force majeure for its polyethylene products Tuesday, according to a letter to customers that was obtained by Platts.
The company said in the letter that the move was caused by issues affecting its ethylene production, causing a "contingency event" which brought on the force majeure.
"We are in the process of evaluating the expected duration and will provide you with updates as more information becomes available," the letter said.
Calls and emails to the company seeking comment were not immediately returned Tuesday.
Industry sources said CPChem has been tight on PE inventory in recent months, and that the latest incident at its Sweeny, Texas, facility was the reason for the force majeure.
CPChem shut three steam crackers at its olefins complex in Sweeny following a power distribution system failure on Saturday, the company told the Texas Commission on Environmental Quality this week. The emissions event associated with work to return utilities to the ethylene units is to be completed by Thursday, the company added in the TCEQ filing.
A startup date for the crackers has not been announced by the company.
The Sweeny complex, which has estimated ethylene production of 1.9 million mt/year, previously experienced power-related outages on April 16 and March 10, according to company filings with TCEQ.
CPChem operates PE units at Cedar Bayou, Pasadena and Orange, Texas, and has an estimated annual capacity of 3.49 billion lbs/year for high density polyethylene, 1.87 billion lbs/year for linear low density polyethylene and 620 million lbs/year for low density polyethylene.
CPChem is the second PE producer to declare a force majeure in recent weeks. Formosa Plastics issued one for HDPE high-molecular weight film products on May 6 following a fire at its Point Comfort, Texas, petrochemical complex.
Meanwhile, US producers are seeking a 4-cent/lb increase for domestic PE contracts that was delayed from last month. April contracts rolled over from March levels after industry sources said the increase was met by heavy resistance from buyers. Buyer sources have argued that May contract prices should decrease, citing lower demand.
