The Urethane Blog
Everchem Updates
VOLUME XXI
September 14, 2023
Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: — read more
August 30, 2021
Ida makes US landfall in Louisiana as powerful Category 4 hurricane
Author: Al Greenwood
2021/08/29
HOUSTON (ICIS)–Hurricane Ida made landfall on Sunday in Louisiana as a powerful Category 4 hurricane, and meteorologists expect the storm will continue north, following the state’s chemical corridor.
Many companies have already shut down plants in anticipation to the storm. These plants make many plastics and chemicals that are in short supply and at record prices. If they stay idled long enough, the shutdowns will further tighten markets.
STORM
Ida made landfall near Port Fourchon in Louisiana with maximum sustained wind speeds of 150 miles/hour (241 km/hour), making it a Category 4 hurricane on the Saffir-Simpson storm scale.
Ida is moving northwest at 13 miles/hour, according to the National Hurricane Center.
The following map shows the path of the storm.
Source: National Hurricane Center
PLANT SHUTDOWNS
Dow shut down its operations in Louisiana at its St Charles site in Taft and its Plaquemine site. Both sites have crackers and plants that make polyethylene (PE).
The St Charles site also makes acetic acid, acrylic acid, ethylene oxide (EO), glycol ethers and surfactants, among other chemicals.
The Plaquemine site also produces benzene, toluene, EO, glycol ethers, propylene glycol (PG) and propylene oxide (PO), among other chemicals.
At Baton Rouge, ExxonMobil is adjusting its rates and shutting down some units at its complex.
The ExxonMobil site has a refinery and a chemical complex that makes ethylene, propylene, butadiene (BD), PE, polypropylene (PP), phthalic anhydride (PA), plasticizers, benzene, toluene, isopropanol (IPA), base oils and various other chemicals.
BASF plans to idle its Geismar plants by Sunday. It makes butanediol (BDO), EO, methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyether polyols.
Phillips 66 shut down its Alliance refinery in Belle Chasse, Louisiana. In addition to fuel, the refinery makes benzene, mixed xylenes (MX) toluene and propylene.
Shell shut down its plants in Geismar and Norco.
Geismar makes linear alpha olefins (LAO), ethylene glycol (EG), EO and glycol ethers.
Norco makes ethylene, propylene and BD.
Cornerstone is shutting down its acrylonitrile (ACN) and melamine plants in Louisiana.
It is the sole melamine plant in the US. The material is used to make laminates such as Formica.
The products made at many of these plants are already in short supply and the shutdowns could aggravate availability.
The ICIS assessment for US polymeric MDI is at a record high, reflecting the tightness in the market.
Likewise, ICIS has assessed North American BDO contracts and US melamine contracts at record highs before the hurricane.
ICIS recently assessed US contract prices for propylene at a double-digit increases.
Other plants could shut down as Ida moves inland.
The eastern part of Louisiana hit by Ida has a heavy concentration of plants that make polyvinyl chloride (PVC), a plastic used to make pipes as well as siding and profiles used in house construction.
US contract prices for PVC had already hit records before Hurricane Ida.
PVC is made with chlorine, and eastern Louisiana has several plants that make the chemical, along with caustic soda, a by-product of these units.
OIL SHUT-INS
As of Saturday afternoon, oil and gas operators have evacuated 279 platforms, nearly 50% in the Gulf of Mexico, according to the US Bureau of Safety and Environmental Enforcement (BSEE).
Producers have shut in nearly 91% of oil production and nearly 85% of gas production.
POWER OUTAGES
So far, more than 110,000 power outages have been reported to utility companies as of Sunday afternoon, according to PowerOutage.US.
Power outages can shut down operations at chemical plants and delay their restart.
PORT RESTRICTIONS, SHUTDOWNS
Ports threatened by Hurricane Ida have either restricted operations or shut them down.
The following table shows the status of several ports. X-Ray is when tropical storms or hurricane-force storm is predicted to make landfall within 48 hours, Yankee within 24 hours and Zulu within 12.
| Port | Status | Condition |
| New Orleans, Louisiana | Closed | Zulu |
| Plaquemines, Louisiana | Closed | Zulu |
| South Louisiana, Louisiana | Closed | Zulu |
| St Bernard, Louisiana | Closed | Zulu |
| Baton Rouge, Louisiana | Closed | Zulu |
| Pascagoula, Mississippi | Closed | Zulu |
| Biloxi, Mississippi | Closed | Zulu |
| Gulfport, Mississippi | Closed | Zulu |
| Mobile, Alabama | Open with Restrictions | Yankee |
| Pensacola, Florida | Open with Restrictions | X-Ray |
| Panama City, Florida | Open with Restrictions | X-Ray |
RAIL UPDATE
The New Orleans Flood Protection Authority was scheduled to close by Saturday afternoon, which would disrupt all eastward and westward rail routes going through New Orleans, including interchange routes on other carriers.
BNSF was scheduled to suspend all rail operations between Lafayette, Louisiana, and New Orleans at 1200 local time on Saturday.
Norfolk Southern said its operations would be disrupted when the authority shuts down the final flood gate on Saturday at 1400 local time. Shipments destined to New Orleans will be affected for about 48 hours, Norfolk Southern said on Friday.
Union Pacific was scheduled to suspend operations at its intermodal terminal in Avondale, Louisiana at 1600 local time on Friday.
Kansas City Southern and CSX both said on Friday that they are taking steps to prepare for Ida. They did not announce any suspensions.
POTENTIAL FOR DAMAGE
Ida’s size, strength and path could cause billions of dollars worth of damage.
The property data firm CoreLogic estimated on Friday that Ida’s storm surge is threatening 941,392 homes. If all of these homes were destroyed and replaced, CoreLogic estimates that the cost would be $220.37bn.
The reconstruction cost value represents a worst-case scenario, CoreLogic said. For reference, the firm estimated in 2020 that Hurricane Laura may have caused $8bn-12bn in insurable losses.
Home repairs, remodelling and construction make up an important end market for several chemicals and polymers.
The white pigment titanium dioxide (TiO2) is used in paints.
Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropnaol (IPA).
Blends of aliphatic and aromatic solvents are also used to make paints and coatings.
For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation.
Polyurethanes are made of MDI, TDI and polyols.
High density polyethylene (HDPE) is used in pipe. PVC is used to make cladding, window frames, wires and cables, flooring and roofing membranes.
Unsaturated polyester resins (UPR) are used to make coatings and composites.
Vinyl acetate monomer (VAM) is used to make paints and adhesives.
Additional reporting by Adam Burkin, Tracy Dang, Michael Sims, Antoinette Smith and Alex Snodgrass
Thumbnail image shows path of Ida. Source: National Hurricane Center
HOUSTON (ICIS)–Hurricane Ida made landfall on Sunday in Louisiana as a powerful Category 4 hurricane, and meteorologists expect the storm will continue north, following the state’s chemical corridor.
Many companies have already shut down plants in anticipation to the storm. These plants make many plastics and chemicals that are in short supply and at record prices. If they stay idled long enough, the shutdowns will further tighten markets.
STORM
Ida made landfall near Port Fourchon in Louisiana with maximum sustained wind speeds of 150 miles/hour (241 km/hour), making it a Category 4 hurricane on the Saffir-Simpson storm scale.
Ida is moving northwest at 13 miles/hour, according to the National Hurricane Center.
The following map shows the path of the storm.
Source: National Hurricane Center
PLANT SHUTDOWNS
Dow shut down its operations in Louisiana at its St Charles site in Taft and its Plaquemine site. Both sites have plants that make polyethylene (PE).
The St Charles site also makes acetic acid, acrylic acid, ethylene oxide (EO), glycol ethers, surfactants, among other chemicals.
The Plaquemine site also produces benzene, toluene, EO, glycol ethers, propylene glycol (PG), propylene oxide (PO), among other chemicals. Plaquemine also has a cracker.
At Baton Rouge, ExxonMobil is adjusting its rates and shutting down some units at its complex.
The ExxonMobil site has a refinery and a chemical complex that makes ethylene, propylene, butadiene (BD), PE, polypropylene (PP), phthalic anhydride (PA), plasticizers, benzene, toluene, isopropanol (IPA), base oils and various other chemicals.
BASF plans to idle its Geismar plants by Sunday. It makes butanediol (BDO), EO, methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyether polyols.
Phillips 66 shut down its Alliance refinery in Belle Chasse, Louisiana. In addition to fuel, the refinery makes benzene, mixed xylenes (MX) toluene and propylene.
Shell shut down its plants in Geismar and Norco.
Geismar makes linear alpha olefins (LAO), ethylene glycol (EG) EO and glycol ethers.
Norco makes ethylene, propylene and BD.
Cornerstone is shutting down its acrylonitrile (ACN) and melamine plants in Louisiana.
It is the sole melamine plant in the US. The material is used to make laminates such as Formica.
The products made at many of these plants are already in short supply and the shutdowns could aggravate availability.
The ICIS assessment for US polymeric MDI is at a record high, reflecting the tightness in the market.
Likewise, ICIS has assessed North American BDO contracts and US melamine contracts at record highs before the hurricane.
ICIS recently assessed US contract prices for propylene at a double-digit increase.
OIL SHUT-INS
As of Saturday afternoon, oil and gas operators have evacuated 279 platforms, nearly 50% in the Gulf of Mexico, according to the US Bureau of Safety and Environmental Enforcement (BSEE).
Producers have shut in nearly 91% of oil production and nearly 85% of gas production.
POWER OUTAGES
So far, more than 110,000 power outages have been reported to utility companies as of Sunday afternoon, according to PowerOutage.US.
Power outages can shut down operations at chemical plants and delay their restart.
PORT RESTRICTIONS, SHUTDOWNS
Ports threatened by Hurricane Ida have either restricted operations or shut them down.
The following table shows the status of several ports. X-Ray is when tropical or hurricane force storm is predicted to make landfall within 48 hours, Yankee within 24 and Zulu within 12.
| Port | Status | Condition |
| New Orleans, LA | Closed | Zulu |
| Plaquemines, LA | Closed | Zulu |
| South Louisiana, LA | Closed | Zulu |
| St Bernard, LA | Closed | Zulu |
| Baton Rouge, LA | Closed | Zulu |
| Pascagoula, MS | Closed | Zulu |
| Biloxi, MS | Closed | Zulu |
| Gulfport, MS | Closed | Zulu |
| Mobile, AL | Open with Restrictions | Yankee |
| Pensacola, FL | Open with Restrictions | X-Ray |
| Panama City, FL | Open with Restrictions | X-Ray |
RAIL UPDATE
The New Orleans Flood Protection Authority was scheduled to close by Saturday afternoon, which would disrupt all eastward and westward rail routes going through New Orleans, including interchange routes on other carriers.
BNSF was scheduled to suspend all rail operations between Lafayette, Louisiana, and New Orleans at 1200 local time on Saturday.
Norfolk Southern said its operations would be disrupted when the authority shuts down the final flood gate at 1400 local time. Shipments destined to New Orleans will be affected for about 48 hours, Norfolk Southern said on Friday.
Union Pacific was scheduled to suspend operations at its intermodal terminal in Avondale, Louisiana at 1600 local time on Friday.
Kansas City Southern and CSX both said on Friday that they are taking steps to prepare for Ida. They did not announce any suspensions.
POTENTIAL FOR DAMAGE
Ida’s size, strength and path could cause billions of dollars worth of damage.
The property data firm CoreLogic estimated on Friday that Ida’s storm surge is threatening 941,392 homes. If all of these homes were destroyed and replaced, CoreLogic estimates that the cost would be $220.37bn.
The reconstruction cost value represents a worst-case scenario, CoreLogic said. For reference, the firm estimated in 2020 that Hurricane Laura may have caused $8bn-12bn in insurable losses.
Home repairs, remodelling and construction make up an important end market for several chemicals and polymers.
The white pigment titanium dioxide (TiO2) is used in paints.
Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropnaol (IPA).
Blends of aliphatic and aromatic solvents are also used to make paints and coatings.
For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation.
Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols.
High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes.
Unsaturated polyester resins (UPR) are used to make coatings and composites.
Vinyl acetate monomer (VAM) is used to make paints and adhesives.
Additional reporting by Adam Burkin, Tracy Dang, Michael Sims, Antoinette Smith and Alex Snodgrass
Thumbnail image shows path of Ida. Source: National Hurricane Center
August 27, 2021
Press Release of Recticel – 27 August 2021 First half-year 2021 results – Strong volumes – Solid margins – Integration of FoamPartner
Net sales increase from EUR 374.3 million to EUR 596.2 million (+59.3%), of which 39.7% organic growth, 0.4% currency effect and a EUR 71.9 million contribution from 2Q2021 FoamPartner sales Adjusted EBITDA: from EUR 19.0 million to EUR 56.9 million Result of the period (share of the Group): from EUR 60.1 million (including EUR 68.8 million result from discontinued operations) to EUR 28.0 million Net financial debt: EUR 206.6 million
Olivier Chapelle (CEO): “The positive sales trend observed during 1Q2021 continued in 2Q2021, driven by very strong demand in Insulation and solid demand in Engineered Foams. In Bedding, volumes are now improving due to the lifting of the mobility and business restrictions which still affected Germany and The Netherlands specifically during 1H2021. The chemical raw materials supply remains very tight due to planned maintenance and new force majeure incidents at the premises of our suppliers, affecting primarily the MDI availability and pricing. Normalization of the situation remains difficult to predict, and we continue to adapt pricing where necessary.
The integration of FoamPartner in Engineered Foams progresses smoothly, and forecasted synergies at the horizon of 2023 are expected to reach EUR 18 million. The divestment process of the Bedding business is on track and binding offers are expected by the end of 3Q2021. Due to some delay with the carve-out process, the closing of the acquisition of Gór-Stal’s insulation board business is now expected to take place in the course of 4Q2021.
Finally, there will be an important change in the composition of the Group Management Committee: after 19 years of service as CFO and Member of the Group Management Committee, Jean-Pierre Mellen has decided to retire on 31 August 2021. He will be succeeded by Dirk Verbruggen, currently General Counsel & General Secretary, who will combine the CFO and General Counsel responsibilities. Dirk joined Recticel’s Legal Department in 1999, and was appointed General Counsel & General Secretary and member of the Management Committee in 2012. Jean-Pierre will continue to provide support until August 2022 for special assignments and in order to ensure a smooth transition. I take the opportunity to warmly thank Jean-Pierre for his many contributions and total commitment to Recticel.”
OUTLOOK Our underlying end-use markets continue to show positive momentum in a still very volatile environment. Based upon the current trading, our Group confirms its expectation of an Adjusted EBITDA in a range between EUR 123 million to EUR 133 million for the full year 2021, including the contributions of FoamPartner (9 months) and its related synergies.
August 27, 2021
Press Release of Recticel – 27 August 2021 First half-year 2021 results – Strong volumes – Solid margins – Integration of FoamPartner
Net sales increase from EUR 374.3 million to EUR 596.2 million (+59.3%), of which 39.7% organic growth, 0.4% currency effect and a EUR 71.9 million contribution from 2Q2021 FoamPartner sales Adjusted EBITDA: from EUR 19.0 million to EUR 56.9 million Result of the period (share of the Group): from EUR 60.1 million (including EUR 68.8 million result from discontinued operations) to EUR 28.0 million Net financial debt: EUR 206.6 million
Olivier Chapelle (CEO): “The positive sales trend observed during 1Q2021 continued in 2Q2021, driven by very strong demand in Insulation and solid demand in Engineered Foams. In Bedding, volumes are now improving due to the lifting of the mobility and business restrictions which still affected Germany and The Netherlands specifically during 1H2021. The chemical raw materials supply remains very tight due to planned maintenance and new force majeure incidents at the premises of our suppliers, affecting primarily the MDI availability and pricing. Normalization of the situation remains difficult to predict, and we continue to adapt pricing where necessary.
The integration of FoamPartner in Engineered Foams progresses smoothly, and forecasted synergies at the horizon of 2023 are expected to reach EUR 18 million. The divestment process of the Bedding business is on track and binding offers are expected by the end of 3Q2021. Due to some delay with the carve-out process, the closing of the acquisition of Gór-Stal’s insulation board business is now expected to take place in the course of 4Q2021.
Finally, there will be an important change in the composition of the Group Management Committee: after 19 years of service as CFO and Member of the Group Management Committee, Jean-Pierre Mellen has decided to retire on 31 August 2021. He will be succeeded by Dirk Verbruggen, currently General Counsel & General Secretary, who will combine the CFO and General Counsel responsibilities. Dirk joined Recticel’s Legal Department in 1999, and was appointed General Counsel & General Secretary and member of the Management Committee in 2012. Jean-Pierre will continue to provide support until August 2022 for special assignments and in order to ensure a smooth transition. I take the opportunity to warmly thank Jean-Pierre for his many contributions and total commitment to Recticel.”
OUTLOOK Our underlying end-use markets continue to show positive momentum in a still very volatile environment. Based upon the current trading, our Group confirms its expectation of an Adjusted EBITDA in a range between EUR 123 million to EUR 133 million for the full year 2021, including the contributions of FoamPartner (9 months) and its related synergies.
August 27, 2021
Tropical Storm Ida forms in Caribbean, heads towards Louisiana
Author: Al Greenwood
2021/08/26
HOUSTON (ICIS)–Tropical Storm Ida formed on Thursday in the Caribbean Sea, and meteorologists expect it will become a hurricane before making landfall in southeastern Louisiana by Sunday.
Ida has maximum sustained winds of 40 miles/hour (65 km/hour), according to the National Hurricane Center.
It is 100 miles west-southwest of Negril, Jamaica and 130 miles southeast of Grand Cayman. It is moving northwest at 14 miles/hour. Source: National Hurricane Center
Projected storm paths have it crossing over the center of the US Gulf, where federal offshore oil production accounts for 17% of total US crude output, according to the Energy Information Agency (EIA).
Federal offshore natural gas production in the Gulf accounts for 5% of total US dry gas output.
Chevron said it is moving non-essential personnel off its platforms in the Gulf of Mexico, although production remains at normal levels.
Louisiana has several petrochemical plants and refineries, many of which dealt with the active hurricane season last year that saw Lake Charles get hit by more than one storm.
Markets are still recovering from the disruptions caused by last year’s hurricane season and winter storm Uri in February.
Markets could face another wave of disruptions if the storm makes landfall in Louisiana as a major hurricane.
Participants in US polymers markets said they are monitoring the situation.
A polymer distribution company told ICIS that it is warning customers of possible storm impacts stretching from Beaumont and Orange in Texas to Lake Charles in Louisiana by early next week.
While ethylene supply has loosened considerably during the last few months, polymer-grade propylene (PGP) inventory levels remain well below average, which has rendered PGP spot prices unusually sensitive to production issues.
Demand for both olefins is strong.
A majority of aromatics capacity is in the US Gulf region. Market participants could see key disruptions to supply and transportation of benzene if large-scale refineries were forced to halt production amid inclement weather conditions.
The US methanol market is facing tighter supplies and higher prices for natural gas feedstock.
With 95% of domestic capacity located on or near the Gulf Coast, any further disruptions to production could have severe ramifications.
Extreme supply tightness persists for US acetic acid and vinyl acetate monomer (VAM) with producers unable to keep pace with demand for both domestic and export markets.
Another hit to Texas-area production, similar to winter storm Uri, would be devastating to US inventories.
Base oil supplies could tighten further if a major hurricane were to disrupt ExxonMobil’s Group I Baton Rouge refinery or Chevron’s Pascagoula Group II refinery.
Butadiene supplies could tighten further if a major hurricane were to disrupt Shell’s Norco site or ExxonMobil’s Baton Rouge site.
Styrene supply right now is ample, but three Louisiana plants – one in Lake Charles and two along the Mississippi River – make up about 30% of North American styrene market share so a direct hit to Louisiana would have an impact.
The US polycarbonate (PC) market is very tight, and Sabic has a plant in Alabama that could have immediate effect on the market if it took a direct hit.
Feedstocks for polyethylene terephthalate (PET) are mostly located along the Gulf Coast.
US ethylene glycol (EG) supply is snug, with at least 25% of North American capacity offline for planned maintenance amid healthy demand into PET.
US EG production is situated in southwestern Louisiana and southeastern Texas along the Gulf Coast, and both plants and nearby ports are susceptible to hurricane damage.
US paraxylene (PX) supply has been plentiful in recent months.
Intermediate purified terephthalic acid (PTA) and PET production largely relies on imports of PX due to much of the production being located on the US East Coast.
Mexico receives most US PX exports so it would be most likely to be affected by any potential storm damage.
In acrylates, Dow has a facility in Taft, Louisiana, that could be impacted. Supply is still snug although largely improved since the spring.
Dow also has isobutanol and N-butanol facilities in Taft. Oxo-alcohol supply is snug-to-tight, and while production is improving, it is still difficult to obtain material, especially for spot buyers.
Glycol ethers have been tight recently because of the shortage of acetic acid. This impacts propylene glycol methyl acetate (PMA) in particular.
Shell has a facility in Geismar, Louisiana, and Dow has one in Plaquemine, Louisiana.
The US ethyl acetate (etac) market has been facing strong demand amid tighter than usual supply. If the storms hit any acetic acid or etac production located in the US Gulf, then the supply constraints could worsen.
US gasoline and refined product demand has been strong through the summer driving season, although it failed to reach 2019 levels. Demand is slowly trending downward on seasonal factors, although any supply impacts from storms in the US Gulf could place upwards pressure on the market.
While Latin America is not in the storm path, its markets that rely on US imports could be affected.
Any delay in resuming normal levels of US exports that can result from new plant disruptions will impact Mexico that is already short of supply for PE and PP.
As the storm approaches the coast, companies may choose to shut down chemical plants and refineries as a precaution.
If the storm makes landfall in southern Louisiana, flood gates in the state could be closed.
When the flood gates are closed, it prevents interchange among railroad companies with eastern carriers. That would cause delays in rail shipments, compounding the logistical constraints that have already disrupted markets.
The storm could also cause power outages, which could shut down petrochemical complexes in the area.
(adds paragraphs 4-40)
Additional reporting by Ignacio Sotolongo, Anna Matherne, Amanda Hay, John Donnelly, Antoinette Smith, Deniz Koray, Alex Snodgrass, Renato Frimm, Adam Burkin and Zachary Moore
Click here for the topic page on US Gulf storms – impact on chemicals.
Visit the ICIS supply chain topic page.
Visit the ICIS US Gulf Coast polar storm topic page.
August 27, 2021
Tropical Storm Ida forms in Caribbean, heads towards Louisiana
Author: Al Greenwood
2021/08/26
HOUSTON (ICIS)–Tropical Storm Ida formed on Thursday in the Caribbean Sea, and meteorologists expect it will become a hurricane before making landfall in southeastern Louisiana by Sunday.
Ida has maximum sustained winds of 40 miles/hour (65 km/hour), according to the National Hurricane Center.
It is 100 miles west-southwest of Negril, Jamaica and 130 miles southeast of Grand Cayman. It is moving northwest at 14 miles/hour. Source: National Hurricane Center
Projected storm paths have it crossing over the center of the US Gulf, where federal offshore oil production accounts for 17% of total US crude output, according to the Energy Information Agency (EIA).
Federal offshore natural gas production in the Gulf accounts for 5% of total US dry gas output.
Chevron said it is moving non-essential personnel off its platforms in the Gulf of Mexico, although production remains at normal levels.
Louisiana has several petrochemical plants and refineries, many of which dealt with the active hurricane season last year that saw Lake Charles get hit by more than one storm.
Markets are still recovering from the disruptions caused by last year’s hurricane season and winter storm Uri in February.
Markets could face another wave of disruptions if the storm makes landfall in Louisiana as a major hurricane.
Participants in US polymers markets said they are monitoring the situation.
A polymer distribution company told ICIS that it is warning customers of possible storm impacts stretching from Beaumont and Orange in Texas to Lake Charles in Louisiana by early next week.
While ethylene supply has loosened considerably during the last few months, polymer-grade propylene (PGP) inventory levels remain well below average, which has rendered PGP spot prices unusually sensitive to production issues.
Demand for both olefins is strong.
A majority of aromatics capacity is in the US Gulf region. Market participants could see key disruptions to supply and transportation of benzene if large-scale refineries were forced to halt production amid inclement weather conditions.
The US methanol market is facing tighter supplies and higher prices for natural gas feedstock.
With 95% of domestic capacity located on or near the Gulf Coast, any further disruptions to production could have severe ramifications.
Extreme supply tightness persists for US acetic acid and vinyl acetate monomer (VAM) with producers unable to keep pace with demand for both domestic and export markets.
Another hit to Texas-area production, similar to winter storm Uri, would be devastating to US inventories.
Base oil supplies could tighten further if a major hurricane were to disrupt ExxonMobil’s Group I Baton Rouge refinery or Chevron’s Pascagoula Group II refinery.
Butadiene supplies could tighten further if a major hurricane were to disrupt Shell’s Norco site or ExxonMobil’s Baton Rouge site.
Styrene supply right now is ample, but three Louisiana plants – one in Lake Charles and two along the Mississippi River – make up about 30% of North American styrene market share so a direct hit to Louisiana would have an impact.
The US polycarbonate (PC) market is very tight, and Sabic has a plant in Alabama that could have immediate effect on the market if it took a direct hit.
Feedstocks for polyethylene terephthalate (PET) are mostly located along the Gulf Coast.
US ethylene glycol (EG) supply is snug, with at least 25% of North American capacity offline for planned maintenance amid healthy demand into PET.
US EG production is situated in southwestern Louisiana and southeastern Texas along the Gulf Coast, and both plants and nearby ports are susceptible to hurricane damage.
US paraxylene (PX) supply has been plentiful in recent months.
Intermediate purified terephthalic acid (PTA) and PET production largely relies on imports of PX due to much of the production being located on the US East Coast.
Mexico receives most US PX exports so it would be most likely to be affected by any potential storm damage.
In acrylates, Dow has a facility in Taft, Louisiana, that could be impacted. Supply is still snug although largely improved since the spring.
Dow also has isobutanol and N-butanol facilities in Taft. Oxo-alcohol supply is snug-to-tight, and while production is improving, it is still difficult to obtain material, especially for spot buyers.
Glycol ethers have been tight recently because of the shortage of acetic acid. This impacts propylene glycol methyl acetate (PMA) in particular.
Shell has a facility in Geismar, Louisiana, and Dow has one in Plaquemine, Louisiana.
The US ethyl acetate (etac) market has been facing strong demand amid tighter than usual supply. If the storms hit any acetic acid or etac production located in the US Gulf, then the supply constraints could worsen.
US gasoline and refined product demand has been strong through the summer driving season, although it failed to reach 2019 levels. Demand is slowly trending downward on seasonal factors, although any supply impacts from storms in the US Gulf could place upwards pressure on the market.
While Latin America is not in the storm path, its markets that rely on US imports could be affected.
Any delay in resuming normal levels of US exports that can result from new plant disruptions will impact Mexico that is already short of supply for PE and PP.
As the storm approaches the coast, companies may choose to shut down chemical plants and refineries as a precaution.
If the storm makes landfall in southern Louisiana, flood gates in the state could be closed.
When the flood gates are closed, it prevents interchange among railroad companies with eastern carriers. That would cause delays in rail shipments, compounding the logistical constraints that have already disrupted markets.
The storm could also cause power outages, which could shut down petrochemical complexes in the area.
(adds paragraphs 4-40)
Additional reporting by Ignacio Sotolongo, Anna Matherne, Amanda Hay, John Donnelly, Antoinette Smith, Deniz Koray, Alex Snodgrass, Renato Frimm, Adam Burkin and Zachary Moore
Click here for the topic page on US Gulf storms – impact on chemicals.
Visit the ICIS supply chain topic page.
Visit the ICIS US Gulf Coast polar storm topic page.
Everchem Updates Archive 
Sign Up for Email Updates