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INEOS' Grangemouth PP outage causes market jitters in UK

  • Nov.22,2018
  • Source: ICIS News

UK polypropylene (PP) buyers are being affected by a supply interruption at European chemical major INEOS' Grangemouth facility, sources said on Wednesday.

INEOS has sent letters to customers informing them about the supply disruption at the 285,000 tonne/year PP plant.

The plant was on a planned shutdown, but start-up has been delayed by several weeks.

“It was initially due back up on 6 October,” said a buyer.

INEOS was not immediately available for comment, but in its letter said the delay was due to several reasons, including unseasonably inclement weather conditions, a series of unexpected issues and “unforeseeable plant integrity" issues.

Force majeure has not been declared, however.

"INEOS will be unable to supply and deliver polypropylene from PP3 in accordance with its obligations,” the company said.

A couple of buyers said they were surprised that force majeure had not been called, adding they expected the restrictions to last into December.

Product was available elsewhere to cover shortfalls caused by the plant, but at a price.

“I have had to pay more, but it will be a lot cheaper than stopping lines,” said a buyer.

Another buyer said lines would probably have to be stopped if the plant was delayed further.

In its letter, INEOS estimated normal supply to resume within four weeks, assuming a successful restart of the plant by 26 November.

There was concern in the UK as contingency plans for Brexit meant that many buyers were now buying extra supply, as the situation remains very unclear.

Another problem for UK buyers trying to get hold of extra volumes is the lack of truck space, as low water levels on the River Rhine continue to hamper barge transport.

Nervousness over PP supply was more for December than November, as holidays would also affect transport over the period.

The linear low density polyethylene (LLDPE) plant at the same site came back on stream several weeks ago following the planned maintenance.

PP is used in packaging, the manufacture of household goods, and also in the automotive industry.