February 26, 2021

Yet Another Gulf Update

Post-freeze petrochemical restart efforts continue on US Gulf Coast

Houston — US Gulf Coast petrochemical producers continued efforts Feb. 25 to assess damage from sustained sub-freezing temperatures in the week of Feb. 15 and moved ahead with plant restarts when able.

Market sources said Dow Chemical was restarting its three crackers in Freeport, Texas, which have a combined 3.2 million mt/year of ethylene capacity. Sources also said ExxonMobil had restarted its 826,000 mt/year cracker at its refining and chemical complex in Beaumont, Texas.

Sources said news of restarts was expected to emerge piecemeal through the week of March 8 and beyond given that shutdowns were so widespread and damage assessments could be lengthy. In addition, producers were expected to assess downstream units as well before restarting crackers to gauge whether repairs were needed before they could receive feedstock.

In addition, supply chains needed to clear freeze-related backlogs on the US Gulf Coast and inland, as the frigid weather affected much of the US, sources noted.

“This is a very widespread situation,” a source said. “It will not be a quick fix.”

Increases in feedstock ethylene and propylene prices were expected to cascade to downstream derivatives on that added cost in addition to tight supply across the petrochemical spectrum, sources said. February spot ethylene prices hit a six-year high of 50 cents/lb FD Mont Belvieu on Feb. 25, up a penny on the day. And the February contract for propylene retroactively settled up 28 cents from January at 88.50 cents/lb.

Here is a rundown of fallout from the freeze:

FORCE MAJEURES

** Dow Chemical: Declared Feb. 19, on 2-ethylhexanol and butanol products from its Texas City, Texas complex

** Formosa Plastics USA: Declared Feb. 19 on US polyethylene

** BASF: Declared Feb. 19 on dioctyl terephthalate (DOTP), a plasticizer, at its Pasadena, Texas, site

** Westlake Chemical: Declared Feb. 19 on US caustic soda, chlorine, PVC and VCM; company has 2.9 million mt/year of US caustic soda capacity, more than 2 million mt/year of PVC capacity, 2.6 million mt/year of VCM; more than 2.26 million mt/year of chlorine capacity at five affected sites

** Formosa Plastics USA: Declared Feb. 18 on US PVC, 1.3 million mt/year of capacity at Point Comfort, Texas, and Baton Rouge, Louisiana, complexes

** Dow Chemical: Declared Feb. 18 on multiple intermediate chemicals produced at plants in Deer Park, Freeport, Texas City and Bayport Texas, Hahnville, Louisiana, and Louisville, Kentucky; declaration includes vinyl acetate monomer (VAM), methyl methacrylate (MMA), glacial methacrylic acid (GMAA), butyl methacrylate (BMA), glycidyl methacrylate (GMA), 2-ethylhexyl Acrylate (2EHA), butyl acrylate (BA), and others; Dow informed South American customers

** Celanese: Declared force majeure Feb. 18 on multiple intermediate chemicals normally sold to customers in the US, Europe and the Middle East, including acetic acid, VAM, ethyl acetate and ethylene vinyl acetate (EVA)

** Total: Declared Feb. 17 on polypropylene produced at its 1.15 million mt/year La Porte, Texas, facility

** Formosa Plastics USA: Declared Feb. 17 on all chlor-alkali products

** LyondellBasell: Declared Feb. 16 on styrene monomer

** Vestolit: Declared Feb. 16 on PVC produced at its Colombia and Mexico plants on lack of upstream vinyl chloride monomer feedstock from US suppliers; plants have a combined 1.8 million mt/year of capacity

** Olin: Declared Feb. 16 on US chlorine, caustic soda, ethylene dichloride, epoxy, hydrochloric acid and other products produced at its Freeport, Texas, complex; on Feb. 18 Olin expanded the declaration in a separate letter to customers to include products made system-wide

** MEGlobal: Declared Feb. 15 on MEG produced at its Freeport, Texas, site

** LyondellBasell: Declared Feb. 15 on US polyethylene

** Flint Hills Resources: Declared Feb. 15 on polypropylene produced at Longview, Texas

** OxyChem: Declared Feb. 15 on US chlorine, caustic soda, EDC, vinyl chloride monomer and polyvinyl chloride

** LyondellBasell: Declared Feb. 15 on US polypropylene

** INEOS Olefins and Polymers USA: Declared Feb. 15 on polypropylene

** OQ Chemicals: Declared Feb. 15 on US oxo-alcohols, aldehydes, acids and esters produced at its Bat City, Texas, operations

SHUTDOWNS

** Westlake Chemical: 331,763 mt/year cracker, 249,475 mt/year chlorine, 274,423 mt/year caustic soda, 680,388 mt/year vinyl chloride monomer, 680,388 mt/year polyvinyl chloride, Calvert City, Kentucky

** Eastman Chemical: 7.33 million mt/year ethylene capacity, Longview, Texas

** INEOS: 1.89 million mt/year of ethylene capacity, Chocolate Bayou, Texas

** LyondellBasell: 3.26 million mt/year of ethylene capacity in Channelview, La Porte and Corpus Christi, Texas

** MEGlobal: 750,000 mt/year monoethylene glycol (MEG) plant, Freeport, Texas

** Total: 1.15 million mt/year PP, La Porte, Texas

** Lotte Chemical: 700,000 mt/year MEG, Lake Charles, Louisiana; 1 million mt/year joint-venture cracker

** Braskem: 360,000 mt/year PP Freeport, Texas; 400,000 mt/year PP La Porte, Texas; 225,000 mt/year PP Seadrift, Texas

** ExxonMobil: Cumulative 1.53 million mt/year from three units, HDPE and LLDPE capacity, Mont Belvieu, Texas

** Indorama Ventures: Port Neches, Texas, 235,867 mt/year cracker, 1 million mt/year ethylene oxide/MEG unit, 238,135 mt/year propylene oxide unit, and 988,000 mt/year of MTBE capacity; Clear Lake, Texas, 435,000 mt/year EO, 358,000 mt/year MEG

** Olin: Freeport, Texas complex, with 3 million mt/year of caustic soda and 2.73 million mt/year of chlorine capacity; 748,000 mt/year of EDC

** OxyChem: Ingleside, Texas, 544,000 mt/year cracker; 248,000 mt/year chlor-alkali; 680,000 mt/year EDC; Deer Park and Pasadena, Texas, 1.27 million mt in PVC capacity; 1.79 million mt/year of VCM capacity; 580,000 mt/year chlor-alkali

** Shintech: Freeport, Texas: 1.45 million mt/year PVC

** Formosa Plastics USA: Entire Point Comfort, Texas, complex, including three crackers with a cumulative capacity of 2.76 million mt/year; 875,000 mt/year of high density polyethylene; 400,000 mt/year of low density PE; 465,000 mt/year of linear low density PE; two PP units with combined capacity of 1.7 million mt/year; 798,000 mt/year of PVC; 1 million mt/year of caustic soda and 910,000 mt/year of chlorine; 753,000 mt/year of VCM; 1.478 million mt/year of EDC; and a cumulative 1.17 million mt/year of monoethylene glycol operated by sister company Nan Ya Plastics

** Dow Chemical: Certain units offline within Dow sites along the US Gulf Coast, but the company did not specify. Dow’s Gulf Coast operations two LDPE units with 552,000 mt/year and 186,000 mt/year HDPE; Dow’s Seadrift, Texas, complex includes 490,000 mt/year LLDPE and 390,000 mt/year HDPE; Dow told South American customers in a letter dated Feb. 16 that the company was assessing impact on PE production capacity “and we know that our ability to supply various products could be affected.”

** TPC Group: Houston site shut down, including 544,310 mt/year butadiene unit, when boilers lost steam

** Motiva Chemicals: Port Arthur, 635,000 mt/year mixed-feed cracker

** Shell: Deer Park, Texas, refining and chemical complex, including two crackers with a combined 961,000 mt/year of capacity

** Shell: Norco, Louisiana, refining and chemical complex, including two crackers with a combined capacity of 1.42 million mt/year

** Chevron Phillips Chemical: Pasadena, Texas, 998,000 mt/year HDPE; also has cumulative 5.35 million mt/year in capacity of six crackers in Port Arthur, Baytown and Sweeny, Texas

RESTARTS

** Dow Chemical: Restarting three crackers at Freeport, Texas, with a combined 3.2 million mt/year of ethylene capacity

** Flint Hills Resources: Restarting 658,000 mt/year PDH unit, Houston

** Dow Chemical: Restarting 750,000 PDH, Freeport, Texas

** Braskem: Restarting 450,000 mt/year PP, La Porte, Texas

** Dow Chemical: restarting 680,000 mt/year cracker in Orange, Texas

** ExxonMobil: Beaumont, Texas, restart activity begun; 826,000 mt/year cracker operational; 225,000 mt/year HDPE; 240,000 mt/year LDPE; 1.19 million mt/year LLDPE with some HDPE capacity

** ExxonMobil: Baytown, Texas, restart activity begun; three crackers with a combined capacity of 3.8 million mt/year; 800,000 mt/year PP

** Sasol: Restarts for 380,000 mt/year EO/MEG, Lake Charles, Louisiana

** Formosa Plastics USA: 513,000 mt/year PVC, 653,000 mt/year VCM, Baton Rouge, Louisiana

** LyondellBasell: Lake Charles, Louisiana, joint-venture 470,000 mt/year LLDPE; 420,000 mt/year LDPE

PRICES

** The US propylene contract price for February settled up 28 cents/lb from January at 88.50 cents/lb

** US spot polymer-grade propylene prices for February fell 8.25 cents/lb on the day Feb. 25 to 93.75 cents FD USG, while March prices fell the same amount to 86 cents/lb FD USG. February prices had reached an all-time high of $1.25/lb on Feb. 23 before news emerged that two of the three US PDH plants were restarting.

** US spot ethylene prices for February rose 1 cent/lb to 51 cents/lb FD Mont Belvieu and rose 3.50 cents/lb to 50.5 cents/lb FD Choctaw; forward-month March prices rose 3.25 cents/lb to 51 cents FD Mont Belvieu and rose 3.50 cents/lb to 49.75 cents/lb FD Choctaw

** US export normal butanol and 2-ethylhexanol prices surged on the week Feb. 25 in line with higher global pricing on the lack of US availability on freeze fallout. NBA prices were assessed up $585/mt at $1,995/mt FOB USG, and 2-EH prices rose $415/mt to $1,995/mt FOB USG

** US acetic acid prices strengthened to a more than two-year high Feb. 25, rising $230/mt to $900/mt FOB USG and 10.43 cents/lb to 40.82 cents/lb on a domestic delivered basis

https://www.spglobal.com/platts/en/products-services/petrochemicals/global-polyolefins-outlook