Brazilian petrochemicals producer Braskem has declared force majeure on polypropylene (PP) supply in Europe because low water levels on the Rhine are disrupting feedstock deliveries to its German operations.
The force majeure took effect on 13 October and was declared as a precautionary measure because feedstock shortages "will soon start to impact" production planning and inventory replenishment, Braskem said in a letter to customers.
Braskem said it intends to fulfil all confirmed purchase orders, although deliveries could be delayed and contracted volumes may not be fully supplied during the force majeure period, which was not specified.
The company operates PP plants in Germany with capacities of 255,000 t/yr in Cologne and 365,000 t/yr in Schkopau.
Braskem does not produce upstream olefins in Europe and sources feedstock for its PP plants from third-party suppliers. Persistently low Rhine water levels have disrupted deliveries of olefins and cracker feedstocks, affecting olefins and polyolefins production at several inland sites in Germany.
The declaration had little immediate impact on PP prices, market participants said, as weak demand continues to outweigh supply concerns despite reduced imports from the Middle East and Asia-Pacific.
Buyers continue to purchase on a hand-to-mouth basis, while weakness across downstream manufacturing sectors and the seasonal fourth-quarter slowdown continue to weigh on sentiment. Many buyers are keeping inventories low ahead of year-end.
