MOSCOW (MRC) -- Lotte Chemical USA, a joint venture (40:60) of the Malaysian company Lotte Chemical Titan and its parent company Lotte Chemical Corporation, has declared force majeure (FM) on monoethylene glycol (MEG) and other products produced at its Louisiana complex after an electrical equipment failure, according to a customer letter seen by S&P Global Platts on May 27.
The letter said the company prepared for heavy storms that hit Lake Charles and other areas along the Texas and Louisiana coasts the week of May 17, but on May 21, "critical electrical equipment" failed and prompted an unexpected plant shutdown. Thus, the FM was declared on May 22.
The letter said further that initial assessments showed that torrential rain caused the failure, which severed electricity supply to critical process equipment.
Lotte operates a 700,000 mt/year MEG plant in Lake Charles that started up in January 2019. The force majeure declaration affects MEG, diethylene glycol (DEG) and triethylene glycol (TEG) production at the Lake Charles site, the letter said.
Market sources said Lotte was expected to restart its operations by May 31. The swift force majeure declaration indicated the company had limited MEG/DEG/TEG stocks when the shutdown occurred.
MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).
According to MRC's ScanPlast report, the estimated PET consumption in Russia reached 64,750 tonnes in March 2021, which corresponds to the previous year's figure (64,520 tonnes). Russia's estimated PET consumption decreased in January-March 2021 by 5% year on year to 182,300 tonnes.
MRC