The Urethane Blog
February 22, 2021
Some US chem plants could take weeks to restart after winter storm
Author: Al Greenwood
2021/02/22
HOUSTON (ICIS)–Chemical plants on the US Gulf Coast could begin to restart within days or weeks, depending on whether they have access to feedstock and utilities and whether they avoided an unexpected cold shutdown, which cokes furnaces and chunks reactors.
Much will depend on whether companies were able to shut down their operations in a controlled and precautionary way, said Brian Pruett, senior vice president of polyethylene (PE) and polypropylene (PP) with CDI, now part of ICIS.
Even then, because such deep freezes are so unusual on the US Gulf Coast, companies may have overlooked some steps, Pruett said. That could complicate restart operations.
Nonetheless, while some plants could take a while to restart, others are coming back online.
CITGO is preparing to restart the east and west plants of its refinery in Corpus Christi, in south Texas, it told state regulators on Monday. Pollution associated with the restart could continue until 4 March.
CITGO had shut down the plant on 15 February because of cold weather, according to sources.
For the most part, a large majority of plants decided to take a controlled, precautionary shutdown, Pruett said. He estimates that 65-75% could restart relatively quickly.
Restarting a plant from a controlled shutdown usually does not take a lot of time, said James Wilson, senior analyst at ICIS.
Pruett said if utilities and feedstock are available, some crackers and polyethylene (PE) plants could begin restart operations within a few days. Refineries could take a couple of days to a week longer because of their size and complexity.
However, Pruett warned that many factors could complicate and prolong restart operations.
The Gulf Coast rarely experiences such cold temperatures, so plant operators do not have experience in dealing with deep freezes.
Plant operators may have failed to properly purge the water in a pump, Pruett said. That pump could suffer damage from the freeze. If there are no parts and no spares immediately available, then the plant will not restart right away. Plants have been known to fly in spare parts from overseas, which will delay restarts.
Wilson added that restarting a plant from a cold shutdown will take longer. Lines need to be properly purged. Pipes could have been damaged if they froze with any liquid inside of them.
Marathon Petroleum told state regulators that it found cracked pipes from the recent freeze at its Galveston Bay refinery in Texas.
For plants that suffered damage, Pruett said it is too early to tell how long they could stay offline. Some companies may decide to start maintenance projects that were planned later in the year. That could further prolong the outages caused by the winter storm.
If the plants escaped damage, they could still take more time to restart because of utility or feedstock shortages, Pruett said.
Some companies have already reported this. Last week, Valero told state regulators that its nitrogen and hydrogen suppliers had lost much of their production capacities.
Some plant restarts will require inspections, which could be delayed because of the coronavirus. Some inspectors may need to take time to attend to their damaged homes.
Additional reporting by Alex Snodgrass
February 22, 2021
Some US chem plants could take weeks to restart after winter storm
Author: Al Greenwood
2021/02/22
HOUSTON (ICIS)–Chemical plants on the US Gulf Coast could begin to restart within days or weeks, depending on whether they have access to feedstock and utilities and whether they avoided an unexpected cold shutdown, which cokes furnaces and chunks reactors.
Much will depend on whether companies were able to shut down their operations in a controlled and precautionary way, said Brian Pruett, senior vice president of polyethylene (PE) and polypropylene (PP) with CDI, now part of ICIS.
Even then, because such deep freezes are so unusual on the US Gulf Coast, companies may have overlooked some steps, Pruett said. That could complicate restart operations.
Nonetheless, while some plants could take a while to restart, others are coming back online.
CITGO is preparing to restart the east and west plants of its refinery in Corpus Christi, in south Texas, it told state regulators on Monday. Pollution associated with the restart could continue until 4 March.
CITGO had shut down the plant on 15 February because of cold weather, according to sources.
For the most part, a large majority of plants decided to take a controlled, precautionary shutdown, Pruett said. He estimates that 65-75% could restart relatively quickly.
Restarting a plant from a controlled shutdown usually does not take a lot of time, said James Wilson, senior analyst at ICIS.
Pruett said if utilities and feedstock are available, some crackers and polyethylene (PE) plants could begin restart operations within a few days. Refineries could take a couple of days to a week longer because of their size and complexity.
However, Pruett warned that many factors could complicate and prolong restart operations.
The Gulf Coast rarely experiences such cold temperatures, so plant operators do not have experience in dealing with deep freezes.
Plant operators may have failed to properly purge the water in a pump, Pruett said. That pump could suffer damage from the freeze. If there are no parts and no spares immediately available, then the plant will not restart right away. Plants have been known to fly in spare parts from overseas, which will delay restarts.
Wilson added that restarting a plant from a cold shutdown will take longer. Lines need to be properly purged. Pipes could have been damaged if they froze with any liquid inside of them.
Marathon Petroleum told state regulators that it found cracked pipes from the recent freeze at its Galveston Bay refinery in Texas.
For plants that suffered damage, Pruett said it is too early to tell how long they could stay offline. Some companies may decide to start maintenance projects that were planned later in the year. That could further prolong the outages caused by the winter storm.
If the plants escaped damage, they could still take more time to restart because of utility or feedstock shortages, Pruett said.
Some companies have already reported this. Last week, Valero told state regulators that its nitrogen and hydrogen suppliers had lost much of their production capacities.
Some plant restarts will require inspections, which could be delayed because of the coronavirus. Some inspectors may need to take time to attend to their damaged homes.
Additional reporting by Alex Snodgrass
February 22, 2021
BDO market sees a booming start
Text size
| Price of BDO hiked after Lunar Chinese New Year. Bid price of BDO soared by around 35% to 22,050yuan/mt on Feb 18 from 16,300yuan/mt on Feb 1. The benefits behind price surge: Strong support from demand: most PTMEG plants run at full capacity or above 100% of capacity now, except for some plants that see supply tightness of feedstock. Sales ratio of BDO is high. Demand from GBL market is strong and buyers are forced to take high-priced feedstock to guarantee regular production. Operating rate of PBT market declined around the Spring Festival amid short feedstock and cautiousness on surging price. Demand from TPU market recovered before the Lunar Chinese New Year. PBAT units sustained production during holiday impacted by the ban on free plastic bags. The stimulus from overseas units: BASF Malaysia and Japan and Lycra US’s BDO units suspended production. Lyondell announced force majeure on BDO units in US and Europe. As a result, supply tightness intensified in Europe and US, which also tightened supply in China. With shorter supply, middlemen realty revised up bid price. Low stocks: plants that had turnaround in Jan sped up to restart after holiday. Suppliers focused on the term volumes or self-consumption, while little-to-no supply available for spot transactions. Sellers were reluctant to sell amid low stocks. BDO price soared after Spring Festival as expected. Market’s supply and demand fundamental remains bullish and BDO price sustains strong. However, such jump has exceeded the tolerance of downstream participants. https://www.ccfgroup.com/newscenter/newsview.php?Class_ID=D00000&Info_ID=2102209980004 |
February 22, 2021
BDO market sees a booming start
Text size
| Price of BDO hiked after Lunar Chinese New Year. Bid price of BDO soared by around 35% to 22,050yuan/mt on Feb 18 from 16,300yuan/mt on Feb 1. The benefits behind price surge: Strong support from demand: most PTMEG plants run at full capacity or above 100% of capacity now, except for some plants that see supply tightness of feedstock. Sales ratio of BDO is high. Demand from GBL market is strong and buyers are forced to take high-priced feedstock to guarantee regular production. Operating rate of PBT market declined around the Spring Festival amid short feedstock and cautiousness on surging price. Demand from TPU market recovered before the Lunar Chinese New Year. PBAT units sustained production during holiday impacted by the ban on free plastic bags. The stimulus from overseas units: BASF Malaysia and Japan and Lycra US’s BDO units suspended production. Lyondell announced force majeure on BDO units in US and Europe. As a result, supply tightness intensified in Europe and US, which also tightened supply in China. With shorter supply, middlemen realty revised up bid price. Low stocks: plants that had turnaround in Jan sped up to restart after holiday. Suppliers focused on the term volumes or self-consumption, while little-to-no supply available for spot transactions. Sellers were reluctant to sell amid low stocks. BDO price soared after Spring Festival as expected. Market’s supply and demand fundamental remains bullish and BDO price sustains strong. However, such jump has exceeded the tolerance of downstream participants. https://www.ccfgroup.com/newscenter/newsview.php?Class_ID=D00000&Info_ID=2102209980004 |
February 22, 2021
US EG suppliers mull options with 85% of capacity stricken by winter storm
Author: Antoinette Smith
2021/02/18
HOUSTON (ICIS)–Most US ethylene glycol (EG) capacity is at reduced rates or shut down as a result of a winter storm that has knocked out power for millions of people and business, and threatened water supply.
Nearly 4m tonnes/year of US EG capacity is affected by the storm, according to the ICIS Supply and Demand Database. This represents 85% of total US EG capacity.
The curtailed production led MEG prices in Asia to surge by 11% as that region returned from the Lunar New Year holiday.
The US is a major exporter of MEG to Europe and ships out limited volumes to Asia.
Affected US plants are as follows (as of time of writing):
| Company | Location |
| Eastman | Longview, Texas |
| Formosa | Point Comfort, Texas |
| Indorama | Port Neches and Clear Lake, Texas |
| Lotte | Lake Charles, Louisiana |
| LyondellBasell | Bayport, Texas |
| MEGlobal | Freeport, Texas |
| Sasol | Lake Charles, Louisiana |
Separate force majeure declarations have been made – LyondellBasell announced its force majeure this week, and Formosa had an existing declaration due to feedstock issues – while other suppliers are allocating sales and evaluating options.
MEGlobal is on sales control with regular customers and discussing options now, according to a source familiar with company operations.
“Feedstock suppliers are in question, so no idea when this will resolve,” the source said.
Regarding Sasol’s situation, a company spokesperson said, “No declaration has been made at this point, given we are still assessing the situation.”
Tight supply has been an issue across chemical markets including, related products butanediol (BDO), which can be used instead of DEG to make polyester polyols, and phthalic anhydride (PA), which can be used along with DEG in unsaturated polyester resins (UPRs).
“A lot of supply chains were still trying to recover after impacts from Q4, so this current round of FM is tough to endure,” said a buying source.
STRUGGLING TO REBALANCE
Before the storm, monoethylene and diethylene glycol (MEG, DEG) production had been struggling to catch up from widespread outages in September and October.
Hurricane Laura shut down plants in southwest Louisiana in late August, and planned maintenance idled other plants – in all affecting two thirds of North American production in late summer/early autumn 2020.
Downstream polyethylene terephthalate (PET) production, which had already been running hard to met strong pandemic-related demand, was curtailed by the MEG shortage.
Although all plants had restarted by late October, pent-up as well as current demand consumed all available quantities. Contract customers have been able to obtain needed volumes but spot cargoes have been extremely limited, pushing prices to 2020 shortage levels.
In February MEG spot cargoes had begun to emerge after being sold out for months, though spot DEG was still very hard to find.
Co-product DEG is only about 9% of EG yields, with MEG around 90%. As a result, DEG supply is much more prone to sudden shortages and prolonged periods to rebalance.
Triethylene glycol (TEG) also has been affected, though it represents a very small portion of the market and is nearing the end of its typical winter demand season.
Consumption of MEG has remained strong, with Americas PET production unable to meet demand particularly from the packaging sector. Imports have filled the gaps, with elevated freight costs being passed down to buyers.
DEG demand continues to be healthy, with residential construction in particular driving consumption both in polyurethanes (PUs) in durable goods, as well as in UPRs, which have numerous construction and remodelling end-uses.
MEG is an intermediate in the production of polyester fibres and polyethylene terephthalate (PET) bottle resins, and as an automotive antifreeze.
Applications for DEG include de-icing fluids, surface coatings, UPR and polyester polyols.
Co-product TEG is used in gas delivery pipes as a dehydrating agent to prevent the gas from freezing. It is also used in the oilfield sector to help extract natural gas.
Glycol producers in the US include Dow, Eastman Chemical, Formosa, Indorama Ventures, Lotte Chemical, LyondellBasell, MEGlobal, Sasol and Shell Chemical.
Focus article by Antoinette Smith
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