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Braskem-Idesa shutting down on natural gas interruption

December 03/2020

MOSCOW (MRC) -- The Braskem-Idesa ethylene-polyethylene (PE) joint venture is shutting down production after receiving notice from Mexico's natural gas pipeline authority that it will unilaterally terminate natural gas delivery, reported Chemweek with reference to Braskem's statement.

"As a result, in compliance with safety protocols, Braskem-Idesa initiated procedures for the immediate interruption of its operating activities, which may have a material effect on the company's operating or financial results, depending on the timing of the stoppage," Braskem says in a statement.

The company says it will take legal measures to resolve the issue, but it cannot estimate the date for the return of its activities.

The Braskem Idesa complex, which comprises one ethane cracker and three PE units totaling 1.05 million metric tons/year, had a utilization rate of 84% in 3Q 2020, according to a recent Braskem presentation. The main grades of PE produced are high density polyethylene (HDPE) for blow molding and film, and low density polyethylene (LDPE) for film.

The outage is expected to support US PE prices. Braskem-Idesa exports some of its production into the US and competes with US manufacturers in Latin America.

As MRC informed before, petrochemical producer Braskem Idesa is investing in an additional ship-unloading pier to increase its ethane imports. The initiative is part of the "fast track" project, which is responsible to provide imported ethane to the Veracruz complex in Mexico.

We remind that in early February, 2020, Braskem said its Braskem Idesa joint venture with the Mexican group Idesa had reached an important milestone with the import of its first ethane from the US, which will be used as feedstock to at the Coatzacoalcos, Mexico, petrochemical complex. Braskem Idesa has spent USD4 million on logistics infrastructure and will be able to import up to 12,800 b/d of ethane to the feed the complex. This quantity represents 19% of the companys 1.05-million metric tons/year steam crackers ethane needs.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, excluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
Author:Margaret Volkova
Tags:PP, PE, LLDPE, PP random copolymer, propylene, LDPE, HDPE, ethylene, gas processing, petrochemistry, Braskem, Mexico, USA.
Category:General News
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