Celanese Declares Force Majeure After Supplier Failures

Celanese has declared force majeure on sales of acetic acid and vinyl acetate monomer sold in the Western Hemisphere, citing operational failures by multiple suppliers of raw materials for those products.

The chemical and specialty materials maker said Friday that production has been challenged by the raw material supply disruptions and other operational issues in its acetyl chain business U.S. gulf coast network. Actions are being taken to offset those production losses, the company said.

As a result Celanese is declaring force majeure, which excuses a company from fulfilling contractual obligations because of circumstances outside its control. Products have been put under sales control, during which all non-contracted orders will be reviewed on a case-by-case basis.

“Celanese regrets the impact this could have on customers and will stay in close communication to minimize the impact of these challenges,” the company said.

U.S. gulf coast production of acetic acid and vinyl acetate monomer is expected to be negatively impacted by 15% to 20% during the second quarter, said Mark Murray, senior vice president of the acetyl chain.

The company plans to use higher-cost facilities and external sourcing to minimize impacts, which will increase incremental costs, Murray said, adding that there may also be a volume impact for the quarter.