Mexichem Continued to Conduct Internal Discussions in Order to Respond to a Force Majeure

Major Latin American PVC producer Mexichem continued to conduct internal discussions in efforts to respond to a force majeure announced last week by its feedstock VCM supplier PPG in the US, a Mexichem source said Wednesday. 

"We're still looking at the situation and looking to fill the quantity [of feedstock VCM] needed," the source said. "Our supply will be affected. It's just a matter of finding out to what extent." 

PPG declared force majeure for liquid caustic soda on a system-wide basis and on vinyl chloride monomer produced at its Lake Charles, Louisiana, facility on December 27 following a chemical fire that began three days prior. 

Market participants had expected Mexichem to declare force majeure in response to the VCM supply disruption. Supply was already tight in the Latin American PVC market stemming from increased demand in the US domestic housing market and leaving little to export, sources said. 

"We hope to make a decision by the end of the week," the Mexichem source said. 

Downstream PVC prices in Latin America were assessed $60/mt higher Wednesday at $1,065/mt CFR Peru and up $90/mt at $1,100/mt CFR Brazil since last assessed on December 19.