The Urethane Blog

Everchem Updates

VOLUME XXI

September 14, 2023

Everchem’s Closers Only Club

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February 24, 2021

Restart Updates

Polar storm paralyses US Gulf Coast petrochemical sector

By Rebecca Trager24 February 2021

The polar storm that descended into the US Gulf Coast on 14 February, bringing unprecedented prolonged freezing temperatures to many parts of Texas, dramatically disrupted petrochemical supplies. Approximately 75% of total US ethylene capacity remained offline as of 23 February, according to analysis by Kevin McCarthy, who covers the global chemicals industry for the Connecticut-based equity research firm Vertical Research Partners, and colleagues.

An image showing a frozen Texas sign

Source: © Joe Raedle/Getty Images

The situation in the aftermath of what’s been dubbed the ‘icepocalypse’ of 2021 is very fluid, with the status of plant operations being updated continually, but the data coming in reveals how badly Texas-based chemicals capacity has been impacted by the record-breaking cold weather. Texas is the petrochemical hub of America.

As of 23 February, 100% of epichlorohydrin production was offline, as was about 90% of ethylene glycol production, more than 70% of polypropylene production, over 60% of epoxy resins production, and about 40% of propylene production, Vertical Research Partners finds.

Shutdowns include one or more crackers operated by Chevron Phillips Chemical, Dow, ExxonMobil, Formosa Plastics, Lyondell and Motiva, according to McCarthy’s research note. In addition, Sasol has also reportedly reduced rates at Lake Charles, Louisiana and Indorama appears to have throttled back or shut down ethylene and ethylene oxide at Port Neches, Texas. Likewise, Lyondell’s ethylene oxide is down at Bayport, Texas.

Most of the 150-plus petrochemical facilities in the Houston area are expecting to come back online sometime this week, according to Chad Burke, president and chief executive of the Economic Alliance Houston Port Region. Some are working through repairs while others are waiting on utilities and feedstock supplies to be restored, he says.

Waiting on utilities

An anonymous representative of one of the largest integrated refining and chemical companies in the Houston port area reports being in ‘various stages of startup’ across its different facilities in the area. Meanwhile, a plant manager at another chemical company in the region says the majority of the roughly 75 sites in the vicinity, including their own, are down waiting to receive utilities like natural gas, steam, nitrogen and water. ‘At this stage it looks like another week before utilities return,’ the plant manager, who also preferred not to be identified, said on 22 February.

Although it is difficult to estimate the impact of these facilities being down for the better part of two weeks, it’s bound to be significant since Houston is the largest petrochemical complex in the world, producing more than 40% of America’s chemicals and about 25% of its fuels.

‘The vast majority of petrochemical plants and refineries in the state ceased all production manufacturing and were idling, except for those that were generating power to help provide added support to the state’s electric grid,’ Hector Rivero, president and chief executive of the Texas Chemical Council and the Association of Chemical Industry of Texas, tells Chemistry World.

At this stage it looks like another week before utilities return

Because Texas doesn’t normally have such extreme weather, the state is not prepared and resourced to handle such conditions. There have been ice storms in Texas over the years, but they are generally brief events. This most recent storm was a multi-day hard freeze.

Many chemical plants in the state and nearby Louisiana are not designed to operate in such extreme conditions, so equipment failures and frozen process lines can decrease operational reliability, explained McCarthy and colleagues in their recent research note. They also cautioned that ‘unfavourable network effects’ can exacerbate the situation because many assets are dependent upon neighbouring plants for utilities, like electric power, and the supply of feedstock or intermediates required to operate.

A ‘mad scramble’

In fact, the storm’s extended freeze caused downed power lines and power loss across Texas, and the state had to initiate rolling blackouts to try to ensure that power demand did not exceed supply. These forced outages will certainly impact global supply and demand for chemicals, Rivero says. Indeed, he points out that the price of gas has already soared in parts of Texas and across the US.

‘With all of these facilities being shut down, a lot of the supply chain was also impacted,’ Rivero adds. ‘It is kind of a mad scramble to secure the resources needed to be able to come back online, and that is starting to happen now.’

A key lesson learned is the need to improve the security of the electricity supply regionally, experts suggest. Aside from the temporary challenges posed by the ice storm, which were severe, the scarcity of electric power also created significant consequences for chemical companies. Manufacturing plants had to shut down because of the need to divert and conserve electric power so that it could be preserved for residential and emergency needs. That is a weakness in the system that had remained under-appreciated prior to this severe weather event.

But there is perhaps some good news to be found in a surprising place. The ongoing pandemic has significantly changed the supply chain, and that could help with the recovery of Texas’ petrochemical industry from this natural disaster.

The interruptions caused by the Covid-19 shutdowns actually deepened the inventories of feedstocks, intermediate products like chemicals and resins, and finished products, according to Burke. ‘Both manufacturers and customers recognised the importance of increasing inventories to insulate against supply chain interruptions,’ he explains. ‘Those lessons learned should actually serve to decrease the time it takes now to get back into production.’

https://www.chemistryworld.com/news/polar-storm-paralyses-us-gulf-coast-petrochemical-sector/4013306.article

February 24, 2021

Restart Updates

Polar storm paralyses US Gulf Coast petrochemical sector

By Rebecca Trager24 February 2021

The polar storm that descended into the US Gulf Coast on 14 February, bringing unprecedented prolonged freezing temperatures to many parts of Texas, dramatically disrupted petrochemical supplies. Approximately 75% of total US ethylene capacity remained offline as of 23 February, according to analysis by Kevin McCarthy, who covers the global chemicals industry for the Connecticut-based equity research firm Vertical Research Partners, and colleagues.

An image showing a frozen Texas sign

Source: © Joe Raedle/Getty Images

The situation in the aftermath of what’s been dubbed the ‘icepocalypse’ of 2021 is very fluid, with the status of plant operations being updated continually, but the data coming in reveals how badly Texas-based chemicals capacity has been impacted by the record-breaking cold weather. Texas is the petrochemical hub of America.

As of 23 February, 100% of epichlorohydrin production was offline, as was about 90% of ethylene glycol production, more than 70% of polypropylene production, over 60% of epoxy resins production, and about 40% of propylene production, Vertical Research Partners finds.

Shutdowns include one or more crackers operated by Chevron Phillips Chemical, Dow, ExxonMobil, Formosa Plastics, Lyondell and Motiva, according to McCarthy’s research note. In addition, Sasol has also reportedly reduced rates at Lake Charles, Louisiana and Indorama appears to have throttled back or shut down ethylene and ethylene oxide at Port Neches, Texas. Likewise, Lyondell’s ethylene oxide is down at Bayport, Texas.

Most of the 150-plus petrochemical facilities in the Houston area are expecting to come back online sometime this week, according to Chad Burke, president and chief executive of the Economic Alliance Houston Port Region. Some are working through repairs while others are waiting on utilities and feedstock supplies to be restored, he says.

Waiting on utilities

An anonymous representative of one of the largest integrated refining and chemical companies in the Houston port area reports being in ‘various stages of startup’ across its different facilities in the area. Meanwhile, a plant manager at another chemical company in the region says the majority of the roughly 75 sites in the vicinity, including their own, are down waiting to receive utilities like natural gas, steam, nitrogen and water. ‘At this stage it looks like another week before utilities return,’ the plant manager, who also preferred not to be identified, said on 22 February.

Although it is difficult to estimate the impact of these facilities being down for the better part of two weeks, it’s bound to be significant since Houston is the largest petrochemical complex in the world, producing more than 40% of America’s chemicals and about 25% of its fuels.

‘The vast majority of petrochemical plants and refineries in the state ceased all production manufacturing and were idling, except for those that were generating power to help provide added support to the state’s electric grid,’ Hector Rivero, president and chief executive of the Texas Chemical Council and the Association of Chemical Industry of Texas, tells Chemistry World.

At this stage it looks like another week before utilities return

Because Texas doesn’t normally have such extreme weather, the state is not prepared and resourced to handle such conditions. There have been ice storms in Texas over the years, but they are generally brief events. This most recent storm was a multi-day hard freeze.

Many chemical plants in the state and nearby Louisiana are not designed to operate in such extreme conditions, so equipment failures and frozen process lines can decrease operational reliability, explained McCarthy and colleagues in their recent research note. They also cautioned that ‘unfavourable network effects’ can exacerbate the situation because many assets are dependent upon neighbouring plants for utilities, like electric power, and the supply of feedstock or intermediates required to operate.

A ‘mad scramble’

In fact, the storm’s extended freeze caused downed power lines and power loss across Texas, and the state had to initiate rolling blackouts to try to ensure that power demand did not exceed supply. These forced outages will certainly impact global supply and demand for chemicals, Rivero says. Indeed, he points out that the price of gas has already soared in parts of Texas and across the US.

‘With all of these facilities being shut down, a lot of the supply chain was also impacted,’ Rivero adds. ‘It is kind of a mad scramble to secure the resources needed to be able to come back online, and that is starting to happen now.’

A key lesson learned is the need to improve the security of the electricity supply regionally, experts suggest. Aside from the temporary challenges posed by the ice storm, which were severe, the scarcity of electric power also created significant consequences for chemical companies. Manufacturing plants had to shut down because of the need to divert and conserve electric power so that it could be preserved for residential and emergency needs. That is a weakness in the system that had remained under-appreciated prior to this severe weather event.

But there is perhaps some good news to be found in a surprising place. The ongoing pandemic has significantly changed the supply chain, and that could help with the recovery of Texas’ petrochemical industry from this natural disaster.

The interruptions caused by the Covid-19 shutdowns actually deepened the inventories of feedstocks, intermediate products like chemicals and resins, and finished products, according to Burke. ‘Both manufacturers and customers recognised the importance of increasing inventories to insulate against supply chain interruptions,’ he explains. ‘Those lessons learned should actually serve to decrease the time it takes now to get back into production.’

https://www.chemistryworld.com/news/polar-storm-paralyses-us-gulf-coast-petrochemical-sector/4013306.article

February 24, 2021

West Coast Ports

Shippers Need Alternatives to West Coast Port Congestion

West Coast Port Congestion
Photo: Bloomberg

February 22, 2021 Robert J. Bowman, SupplyChainBrain

The ports of Los Angeles and Long Beach are currently experiencing severe congestion, with a heavy backup of containers waiting to unload import cargo from Asia. In this conversation with SupplyChainBrain Editor-in-Chief Bob Bowman, Jason Totah, president of Odyssey International Services Inc., discusses alternatives to bringing cargo through overtaxed West Coast ports.

SCB: What’s the situation at the ports of Los Angeles and Long Beach right now?

Totah: It’s quite a logjam, from unloading ships to making containers and chassis available at the port, and appointments to pick up containers. It’s a pretty desperate situation.

SCB: What’s the cause of this congestion?

Totah: Just a lack of planning across the board. This season in particular has been more severe than others because of the pandemic, extra volume, and the vessel alliances omitting and consolidating ports. For various reasons, it’s creating this huge logjam.

SCB: Shouldn’t volumes be slacking off after the holiday peak season, and into Chinese New Year?

Totah: We’ve always had a peak past December, ahead of Chinese New Year. People are uncertain about when factories are going to come back online after Chinese New Year, and the possibility of labor in China being quarantined when they do come back. So everybody’s trying to buy a lot sooner. The anticipation of delays is what’s causing these problems.

SCB: What are you proposing as an alternative for shippers who don’t want to deal with congestion at Long Beach and Los Angeles?

Totah: Our advice has been to have a lot more elasticity in their supply chain, look at different options, and not put all their eggs in one basket. Alternatives would be to use the ports of Seattle or Tacoma as a gateway. Or maybe Oakland, even though there’s not a lot of direct sailings or vessels calling there direct.

SCB: Are Seattle and Tacoma first ports of call inbound from Asia, and last ports of call outbound? Are there a sufficient number of sailings like that in order to take the overflow from L.A./Long Beach?

Totah: Yes. Seattle-Tacoma is either the fourth- or fifth-largest containerport complex in the United States, combining in the Northwest Seaport Alliance. They have quite a lot of sailings coming in. They’re not the super-max vessels, but there are direct sailings from major ports in Asia.

SCB: What about infrastructure beyond the piers in Seattle and Tacoma, such as on-dock or near-dock rail transfer yards, and the ability to transload into trucks as well? Is there adequate capacity for that up there?

Totah: It’s adequate today for the volume they have, but with proper planning it can be scaled. There are a few terminals that have on-dock rail. There’s a similar lack of trucks and chassis, but at smaller scale, than in L.A. and Long Beach.

SCB: How about coming into the Port of Vancouver, British Columbia, then transiting by rail across Canada and down into the U.S. Midwest? Is that an option?

Totah: That has always been an option. Many importers have used it in the past, and it has a customs advantage on valuation because importers don’t pay a harbor maintenance fee when goods arrive at ports in Canada. But the Canadian rails are also congested. You’ll have some people using them, but if you don’t do it regularly, you’re not going to have access to those routings because steamship lines have dedicated space for the people who do.

SCB: Are the lines intent on keeping incoming international containers at the port, so that they can expedite their return to Asia? And does that necessitate transloading inbound cargo into domestic equipment to go inland?

Totah: Yes. Carriers are very reluctant to accept bookings beyond the West Coast. They can give you containers to load your product in, but they don’t want to give you containers to go inland.

SCB: So you have to transload. Is that a good idea anyway? Or does it slow things down?

Totah: Transloading has been a good idea in our view, especially at Seattle/Tacoma, to certain parts of the United States. I’m not proposing that transloading from there into the Southeast is a good option, because the connectivity on the rail isn’t that great. But there are direct points from Seattle/Tacoma to Chicago, Minneapolis, and the Ohio Valley that can offer faster transit time, because international containers don’t move regularly. Domestic trailers move on a daily basis, versus maybe weekly for ocean containers. And congestion at inland rail hubs isn’t as bad for domestic containers. So in terms of transit time and price from port to door, we find that transloading is very competitive.

SCB: When we talk about onward transportation of cargo offloaded on the West Coast and moving into the Midwest, is that mostly by rail? Or does long-haul truck offer an alternative?

Totah: Long-haul over-the-road capacity has been declining for the last several years. There’s a big migration to intermodal. I think that domestic intermodal services are a lot more effective than over-the-road because there’s no limitation on hours of service, or the need for team drivers to deliver the cargo.

SCB: What about bypassing the West Coast altogether, through the Panama Canal and up the East Coast? Is that a viable option today for shippers?

Totah: I think it is. A lot of shippers are based on the East Coast and use all-water services to get there. The demand for it is great, and similar to what I mentioned about going through Vancouver, B.C. Shippers who use the service regularly are committed to it, and give steamship lines the base loads to go in there. It’s not easy for you just to flip-flop to the East Coast based on your needs, because you may not get the space. Up until the last couple of years, there was more demand on the all-water service than via the West Coast. So that’s already at capacity, too.

SCB: What about going in the other direction — from East Asian ports through the Suez Canal, then via transatlantic service to the East Coast?

Totah: It does work from the subcontinent — India, Pakistan, Bangladesh, Sri Lanka, and maybe Singapore, but not from Northeast Asian ports such as Hong Kong. It just adds way too much time. Plus congestion and capacity constraints aren’t limited to the North America trade. It’s also to Europe and other areas. The longer the transit on the water, the more capacity just gets sucked out of the system.

SCB: Do you believe this situation is going to persist throughout 2021?

Totah: I don’t see how it wouldn’t. What we need is a true investment in our industry — for stakeholders to buy more equipment, including containers and chassis, and add vessels. For international trade worldwide, I can’t see it slowing down.

https://www.supplychainbrain.com/articles/32679-shippers-need-alternatives-to-west-coast-port-congestion

February 24, 2021

West Coast Ports

Shippers Need Alternatives to West Coast Port Congestion

West Coast Port Congestion
Photo: Bloomberg

February 22, 2021 Robert J. Bowman, SupplyChainBrain

The ports of Los Angeles and Long Beach are currently experiencing severe congestion, with a heavy backup of containers waiting to unload import cargo from Asia. In this conversation with SupplyChainBrain Editor-in-Chief Bob Bowman, Jason Totah, president of Odyssey International Services Inc., discusses alternatives to bringing cargo through overtaxed West Coast ports.

SCB: What’s the situation at the ports of Los Angeles and Long Beach right now?

Totah: It’s quite a logjam, from unloading ships to making containers and chassis available at the port, and appointments to pick up containers. It’s a pretty desperate situation.

SCB: What’s the cause of this congestion?

Totah: Just a lack of planning across the board. This season in particular has been more severe than others because of the pandemic, extra volume, and the vessel alliances omitting and consolidating ports. For various reasons, it’s creating this huge logjam.

SCB: Shouldn’t volumes be slacking off after the holiday peak season, and into Chinese New Year?

Totah: We’ve always had a peak past December, ahead of Chinese New Year. People are uncertain about when factories are going to come back online after Chinese New Year, and the possibility of labor in China being quarantined when they do come back. So everybody’s trying to buy a lot sooner. The anticipation of delays is what’s causing these problems.

SCB: What are you proposing as an alternative for shippers who don’t want to deal with congestion at Long Beach and Los Angeles?

Totah: Our advice has been to have a lot more elasticity in their supply chain, look at different options, and not put all their eggs in one basket. Alternatives would be to use the ports of Seattle or Tacoma as a gateway. Or maybe Oakland, even though there’s not a lot of direct sailings or vessels calling there direct.

SCB: Are Seattle and Tacoma first ports of call inbound from Asia, and last ports of call outbound? Are there a sufficient number of sailings like that in order to take the overflow from L.A./Long Beach?

Totah: Yes. Seattle-Tacoma is either the fourth- or fifth-largest containerport complex in the United States, combining in the Northwest Seaport Alliance. They have quite a lot of sailings coming in. They’re not the super-max vessels, but there are direct sailings from major ports in Asia.

SCB: What about infrastructure beyond the piers in Seattle and Tacoma, such as on-dock or near-dock rail transfer yards, and the ability to transload into trucks as well? Is there adequate capacity for that up there?

Totah: It’s adequate today for the volume they have, but with proper planning it can be scaled. There are a few terminals that have on-dock rail. There’s a similar lack of trucks and chassis, but at smaller scale, than in L.A. and Long Beach.

SCB: How about coming into the Port of Vancouver, British Columbia, then transiting by rail across Canada and down into the U.S. Midwest? Is that an option?

Totah: That has always been an option. Many importers have used it in the past, and it has a customs advantage on valuation because importers don’t pay a harbor maintenance fee when goods arrive at ports in Canada. But the Canadian rails are also congested. You’ll have some people using them, but if you don’t do it regularly, you’re not going to have access to those routings because steamship lines have dedicated space for the people who do.

SCB: Are the lines intent on keeping incoming international containers at the port, so that they can expedite their return to Asia? And does that necessitate transloading inbound cargo into domestic equipment to go inland?

Totah: Yes. Carriers are very reluctant to accept bookings beyond the West Coast. They can give you containers to load your product in, but they don’t want to give you containers to go inland.

SCB: So you have to transload. Is that a good idea anyway? Or does it slow things down?

Totah: Transloading has been a good idea in our view, especially at Seattle/Tacoma, to certain parts of the United States. I’m not proposing that transloading from there into the Southeast is a good option, because the connectivity on the rail isn’t that great. But there are direct points from Seattle/Tacoma to Chicago, Minneapolis, and the Ohio Valley that can offer faster transit time, because international containers don’t move regularly. Domestic trailers move on a daily basis, versus maybe weekly for ocean containers. And congestion at inland rail hubs isn’t as bad for domestic containers. So in terms of transit time and price from port to door, we find that transloading is very competitive.

SCB: When we talk about onward transportation of cargo offloaded on the West Coast and moving into the Midwest, is that mostly by rail? Or does long-haul truck offer an alternative?

Totah: Long-haul over-the-road capacity has been declining for the last several years. There’s a big migration to intermodal. I think that domestic intermodal services are a lot more effective than over-the-road because there’s no limitation on hours of service, or the need for team drivers to deliver the cargo.

SCB: What about bypassing the West Coast altogether, through the Panama Canal and up the East Coast? Is that a viable option today for shippers?

Totah: I think it is. A lot of shippers are based on the East Coast and use all-water services to get there. The demand for it is great, and similar to what I mentioned about going through Vancouver, B.C. Shippers who use the service regularly are committed to it, and give steamship lines the base loads to go in there. It’s not easy for you just to flip-flop to the East Coast based on your needs, because you may not get the space. Up until the last couple of years, there was more demand on the all-water service than via the West Coast. So that’s already at capacity, too.

SCB: What about going in the other direction — from East Asian ports through the Suez Canal, then via transatlantic service to the East Coast?

Totah: It does work from the subcontinent — India, Pakistan, Bangladesh, Sri Lanka, and maybe Singapore, but not from Northeast Asian ports such as Hong Kong. It just adds way too much time. Plus congestion and capacity constraints aren’t limited to the North America trade. It’s also to Europe and other areas. The longer the transit on the water, the more capacity just gets sucked out of the system.

SCB: Do you believe this situation is going to persist throughout 2021?

Totah: I don’t see how it wouldn’t. What we need is a true investment in our industry — for stakeholders to buy more equipment, including containers and chassis, and add vessels. For international trade worldwide, I can’t see it slowing down.

https://www.supplychainbrain.com/articles/32679-shippers-need-alternatives-to-west-coast-port-congestion

February 24, 2021

Duna Houston Back

DUNA-USA

DUNA-USA 789 followers 2d • Edited • 2 days ago DUNA-USA is grateful to announce we have sustained little damage from the Texas winter storms, and has re-opened at 100% operation.

DUNA employees are all safe, with some damage to households, but are looking forward to getting back to work.

We are ramping up our production schedule to meet customer needs, and our thoughts and prayers are with all affected by this unprecedented event.

https://www.linkedin.com/feed/update/urn:li:activity:6769685291495174144/