Nova Chemicals Ends Force Majeure on HDPE Supplies in Canada
- 15-Nov-2023 12:54 PM
- Journalist: Gabreilla Figueroa
Nova Chemicals recently announced the termination of force majeure on the supply of high-density polyethylene (HDPE) to Moore in Sarnia, Ontario. This decision comes after the force majeure was initially declared on September 14, citing an unplanned power outage at the Corunne ethylene plant in the Sarnia region of Ontario. The Corunne facility serves as a crucial supplier of ethylene to Nova Chemicals' polyethylene production facilities in the same region.
The Corunne ethylene plant's unforeseen power outage prompted the force majeure declaration, impacting the production and supply chain of HDPE. Nova Chemicals, a major player in the industry, took this step to address the challenges posed by the disruption in ethylene supply, which is a key component in the HDPE manufacturing process.
The Sarnia site, where Nova Chemicals produces HDPE, has a substantial annual production capacity, capable of manufacturing 457,000 tonnes of HDPE and 220,000 tonnes of LDPE. The lifting of force majeure is anticipated to bring relief to the HDPE supply chain and alleviate the strain caused by the earlier disruptions.
This force majeure event wasn't the only challenge Nova Chemicals faced in recent times. Earlier reports indicated that the company had also declared force majeure concerning the supply of ethylene, attributing it to an unplanned shutdown of the cracking plant in Joffre, located in Alberta, Canada. The Joffre cracking plant plays a pivotal role in Nova Chemicals' overall ethylene production, with an annual capacity of 745,000 tonnes of ethylene and 50,000 tonnes of propylene.
The termination of force majeure for HDPE in Moore signifies a positive development for Nova Chemicals and the broader industry. HDPE is a widely used polymer with applications across various sectors, and any disruption in its supply chain can have cascading effects on downstream industries.
In the context of the global polyethylene landscape, the United States stands as a major hub for production. Key players in the U.S. polyethylene market include Chevron Phillips Chemical (CP Chem), Dow, LyondellBasell, ExxonMobil, Formosa, INEOS, Total Petrochemicals, and Westlake. These industry giants play a pivotal role in meeting the escalating demand for polyethylene and its derivatives.
Nova Chemicals' decision to lift force majeure on HDPE supplies in Moore, Sarnia, is a significant development with wide-reaching implications for the industry. As a critical player in the production of polyethylene, Nova Chemicals' ability to resume normal operations will contribute to stabilizing the HDPE supply chain. The broader trends in increased polyethylene consumption underscore the importance of a steady and reliable supply chain in meeting the growing demand for these essential materials. The dynamics of force majeure events and their resolution highlight the intricate interdependencies within the polymer industry, where disruptions necessitate prompt and strategic responses to maintain the integrity of the supply chain.