Nova Chemicals declared force majeure today on low density polyethylene (LDPE) and high density polyethylene (HDPE) produced at its Moore unit in Sarnia, Ontario, following an unplanned outage at its Corunna, Ontario, ethylene cracker, according to a letter to customers.
The cracker outage has continued for at least a few weeks, but sources said Nova has been using existing PE inventory to fulfill customer obligations.
The company provided no estimate on the duration of the force majeure and said it has no indication yet on what kind of allocation levels will be needed.
The cracker outage could threaten to limit PE production from other Canadian producers. Additionally, the cracker outage has delayed the start-up of the new 500,000 metric tonne/yr linear low density polyethylene (LLDPE) unit in Sarnia.
The force majeure is contributing to tight supply, particularly in the LDPE market. Sources said spot prices for LDPE have risen by as much as 2-3¢/lb since the beginning of the month because of tight availability.
Nova Chemicals has approximately 220,000 t/yr of LDPE capacity at Moore, along with 250,000 t/yr of HDPE capacity.
