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January 06, 2021 11:02 AM

Total Petrochemicals fire tightens supplies as PP prices soar

Frank Esposito
Plastics News
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    Total Petrochemicals
    Total's LaPorte, Texas, site.

    LA PORTE, Texas—No one was injured in a Dec. 15 fire at a polypropylene resin unit operated by Total Petrochemicals in La Porte, Texas. But the incident is further tightening supplies of PP in North America.

    Regional PP prices soared 14 cents per pound in December and now are up 33.5 cents per pound since May. Sources said another double-digit price hike could take place in January. The Plastics News resin pricing chart will be updated Jan. 7.

    "The fire was extinguished within a few minutes," a company spokeswoman said in a Jan. 5 email to Plastics News. "All personnel were accounted for and there were no injuries."

    In a letter to customers, Total officials said reactors at the site were not damaged and that repairs are under way. They added that the fire was on a line that made impact copolymer PP grades.

    A North American PP market that already has been impacted by tight supplies could be hammered by the outage in La Porte, combined with the unexpected shutdown of a PP line operated by Formosa Plastics Corp. USA in Point Comfort, Texas, according to market watchers contacted by Plastics News.

    "The (PP) market is struggling," Scott Newell of Resin Technology Inc. said in an email. "This feels worse than any hurricane we've ever had." He added that supplies of both propylene monomer and PP resin are "extremely tight."

    "Feedstock pricing is going up and margins are expanding," Newell said. "We're expecting to see demand destruction and other market correcting forces, but in the meantime, we're seeing PP converters actually contemplating the potential of shutting lines down and having to miss orders."

    The North American PP market "is in desperate need" of impact copolymer PP, according to Gerard Selvaggio, a partner at New York City-area PP distributor Blue Clover L.L.C. Polymer Solutions.

    "Buyers still need product at this stage," he said in an email. "As of now, it remains an issue that buyers don't have enough resin to fill orders."

    Selvaggio added that producers of reprocessed PP are selling large volumes because of that material's price advantage vs. virgin PP. Many reprocessed PP suppliers are sold out of that material for the next couple of months, he said.

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