Propylene production at Pemex's Salina Cruz refinery will be suspended for at least one week as a result of a recent fire, a company source said Friday.
Pemex's propylene stock will see a "considerable thinning" as a result of the Mexican state-owned oil company taking the refinery offline, and the company hopes to replenish its monomer supply once operational again, the source said.
Pemex said Friday that firefighters had extinguished the fire, which started Wednesday at the 330,000 b/d Salina Cruz refinery in the southern state of Oaxaca.
The Salina Cruz refinery is the largest in Mexico and a major source of refinery-grade propylene, a key feedstock for the manufacture of polypropylene resin. Salina Cruz is also a major supplier of residual fuel oil to the US state of California.
Indelpro is the largest consumer of propylene in Mexico, sourcing the feedstock domestically through Pemex and via supplemental imports.
The fire was the result of an oil spill reaching an ignition point in the wake of Tropical Storm Calvin flooding the refinery, located on Mexico's Pacific Coast, Pemex said earlier this week.
Prior to Friday's confirmation of a supply interruption, a major US-based seller indicated that even a short-term disruption could open up an export opportunity for US suppliers.
Indelpro, which has production the port of Altamira in Mexico's northeast coast, regularly imports propylene from the US and other regions. Indelpro's nameplate PP capacity is estimated at 590,000 mt/year. The company depends on propylene imports for optimal operation given that Pemex, Mexico's sole propylene supplier, cannot meet its demand.
In the spot market, US spot refinery-grade propylene was assessed up 0.5 cent/lb Wednesday at 24.25-24.75 cents/lb FD USG. US spot polymer-grade propylene was assessed down 0.75 cent/lb Wednesday at 36.75-37.25 cents/lb FD USG.
