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In a letter to customers dated July 23rd, 2024, INEOS announced that they suffered equipment failure and mechanical breakdown on Saturday July 20th that affected Polypropylene impact copolymer (CoPP) products and has declared Force Majeure.
Copolymer Polypropylene markets have already been tightly supplied, and were also impacted by Hurricane Beryl, this new production disruption / Force Majeure and will further reduce supply availability and likely apply additional upward pressure on prices. American Chemistry Council (ACC) data has shown that more than 200 million pounds of Polypropylene were drawn from producers’ collective inventories since April. PP exports have also risen sharply these past few months leaving less material available for domestic consumption.
The Texas Commission on Environmental Quality (TCEQ) shows air emission incident reports from INEOS’ Chocolate Bayou site on July 20th and 22nd that described flaring due to separation of an isolation valve assembly at the Olefins #2 unit.
The Chocolate Bayou, Texas site produces both Olefins and Polypropylene and according to Resintel, the site’s total annual capacity is 926 million pounds. INEOS Olefins & Polymers USA has the capacity to manufacture over 15.3 billion pounds of product across 13 manufacturing sites and a JV site with Chevron Phillips. The company produces a range of chemical derivatives including Ethylene, Propylene, Butadiene, Mixed Butenes, and Crude Benzene.