Spain's Repsol has declared force majeure on polypropylene (PP) supply following technical issues at one of its units in Tarragona. These resulted in the shutdown of the PP2 plant and severely affected PP production, the company said.
Repsol operates two PP units at Tarragona with capacities of 190,000 t/yr and 200,000 t/yr. Market participants said the affected PP2 plant mainly produces PP copolymer grades.
The force majeure, which was declared on 12 June, comes at a time of fundamental weakness in European prices, with the market facing a significant supply overhang on many PP grades. As such, market participants expect the force majeure to have little to no effect on swaying the fundamentals, with prices remaining subdued for all PP grades.
Czech Republic-based Orlen Unipetrol declared force majeure on 11 May after a fire in the PP2 unit at its Litvinov plant. But that did not have any effect on mitigating the supply overhang and the steep fall in PP prices. Market participants said Orlen Unipetrol had lifted that force majeure on 12 June.
