LyondellBasell declares force majeure on PO after Bayport fire

LyondellBasell has declared force majeure on propylene oxide (PO) following a fire at its Bayport Choate site in Texas, raising concerns over near-term supply availability for polyurethane raw materials.

The incident, which occurred on March 12, forced part of the complex to shut down unexpectedly, reducing PO output. The company is continuing to assess the extent of the damage and has not yet provided a timeline for restarting operations or returning to normal production rates.

The Bayport facility is one of LyondellBasell’s key PO production sites, with an estimated capacity of around 600,000 tonnes per year. In addition to PO, the complex also produces derivatives including propylene glycol and glycol ethers.

PO is a critical feedstock for the production of polyether polyols, which are widely used in flexible and rigid polyurethane foams. Any disruption in PO supply therefore has direct implications for downstream PU markets, particularly in sectors such as construction, automotive and furniture.

Market participants said the outage is likely to tighten PO availability in the short term, potentially placing upward pressure on polyol prices if disruption persists. The extent of the impact will depend on the duration of the shutdown and the availability of alternative supply from other producers.

The force majeure comes at a time when polyurethane producers are already facing a range of cost pressures. Crude oil prices have been trending upward in recent weeks, feeding through into higher costs for petrochemical feedstocks across the value chain.

In addition, ongoing geopolitical tensions affecting shipping routes in the Middle East – including disruption linked to the Strait of Hormuz, a key corridor for global energy exports – have added uncertainty to supply chains and contributed to volatility in energy and raw material pricing.

Taken together, these factors are increasing cost pressure for polyurethane manufacturers, who rely on stable supplies of PO and other intermediates to maintain production.

Photograph is for illustrative purposes only and does not depict the fire at Bayport Choate.

LyondellBasell