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Borealis declares force majeure following fire incident in Sweden

May 13/2020

MOSCOW (MRC) -- Austria-based petrochemicals producer Borealis declared force majeure on its steam cracker operations at Stenungsund, Sweden, on 11 May 2020, following a technical incident that led to the shutdown of the olefins plant, reported Chemweek.

The company has informed the affected customers. Borealis says it does not know when the force majeure will be lifted.
The shutdown has impacted the output of the companys downstream production and supply of certain low density polyethylene (LDPE) grades. Its LDPE plant was shut down and the potential start-up date of the facility is currently being investigated.
As a consequence, there is some shortage of certain LDPE film, masterbatch, and wire and cable products, the company says. Borealis aims to minimize the impact to its customers with supply from other Borealis polyolefin production locations. The LDPE plant is the only affected unit from the cracker outage. All other polyolefin plants of Borealiss production location in Stenungsund are running.

As MRC informed earlier, Borealis said Monday that it was still investigating a fire that broke out late Saturday at its Stenungsund steam cracker in Sweden. Borealis said in an initial public statement issued Sunday that "its emergency plan was immediately activated by the local crisis team." The fire broke out on 9 May, at 20:45 CEST.

Market sources said the incident would have an impact on the market, referring back to when the Stenungsund cracker was under force majeure for around 10 days in April which helped noticeably to balance ethylene supply in Northwest Europe, which had been particularly long. Sources are predicting a similar impact as a result of this latest incident, with additional impact on propylene, a source said, as "they were cracking heavier."

We remind that the company declared FM on April 8 due to a technical incident, while before that Borealis had had lowered its steam cracker operating rates as a result of the recent slump in oil prices and the coronavirus lockdowns in Europe.

The Stenungsund cracker can produce 625,000 mt/year of ethylene and 150,000 mt/year of propylene.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, Borealis, Russia, Sweden.
Category:General News
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