Westlake Chemical Lifts Force Majeure Over US PVC and VCM Manufacturing Plant
After close to three months of force majeure, Westlake Chemical has finally lifted the FM at its US Poly Vinyl Chloride (PVC) and feedstock Vinyl Chloride monomer (VCM) plant, the Texas headquartered company announced in a letter to its customers. The force majeure was declared back in mid-February in the aftermath of the polar storm.
The letter stated that resultant of the shutdown of the plants due to the mid-February polar storm, Westlake chemicals is formally lifting the systemwide force majeure condition for PVC and VCM manufactured and shipped from its North American operations that was formally declared on Feb 19.
Devastating polar storm Uri caused shutdowns on the US Gulf Coast (USGC) which impacted PVC production severely where around 57% of PVC capacity went offline. Hurricanes back in Q4 of 2020 hit the US PVC supply whose impacts lasted even into Q1 of 2021 where due to supply crunch prices soared to record highs. The USGC freeze further exacerbated the supply tightness and price of PVC suspension grade crossed USD 1800 per MT in April, for the first time in two decades on FOB Texas basis. At the conclusion of the 2nd week of May, PVC prices lost steam and showed a USD 50 per MT fall since the first week of April. Westlake reported high export prices for PVC than the domestic sales price in the first quarter and is anticipating good PVC pricing momentum into the second and third quarter, being strong quarters for the construction sector.
PVC is the second largest produced plastic polymer accounting for more than 20% among all plastics produced worldwide. Owing to its ideal properties like high tensile strength and thermal resistance, PVC is majorly utilized in a number of end-use industries like construction, packaging, medical and healthcare, electrical and electronics and other. US is the largest exporter of PVC in the world.
VCM is exclusively used in the production of polyvinyl chloride (PVC) which is majorly used in the construction industries. Therefore, the demand of VCM is strongly linked to the region’s PVC consumption, which directly varies with the region’s economic development. US is the world’s second largest manufacturer of VCM.