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USGC cold snap passing, but restarts could take weeks

February 20/2021

MOCOW (MRC) -- Chemical production along the US Gulf Coast (USGC) remained largely offline Friday morning, but with the winter storm passing and temperatures on the rise, producers will be turning their attention to restoring operations. The precise timing will be difficult to gauge, however, said Chemweek.

"Restarting the production units will depend on different factors, ranging from fixing damage caused by the cold weather, restoring utilities, regaining access to natural gas and power supplies, or even just affording the natural gas and electricity spot prices that have rocketed during the storm," notes IHS Markit's Global Aromatics Weekly Market Report.

Temperatures in the Houston area are forecast to reach 55?F on Saturday and 65?F. The cold has had a much more severe impact than many of the Category 45 hurricanes that have hit the region in over past decades. "It is likely to be at least early next week before refinery and petrochemical facilities can return to operations," says IHS Markit.

IHS Markit estimates that about 76% of US toluene capacity has been either shut down or operating at reduced rates. At least 74% of US benzene production capacity has been either shut down or curtailed, and the figures are even higher for derivativesa79% of styrene capacity, 89% of cumene capacity, and 100% of cyclohexane capacity. The picture is similar for olefins, with 62% of US ethylene capacity offline and 66% of US polymer/chemical-grade propylene offline.

Facilities located in Louisiana have generally fared better than those in Texas. In the case of styrene, Americas Styrenics (AmSty) kept its two lines at St. James Parish, Louisiana, online the entire time. Westlake briefly idled its line at Sulphur, Louisiana, on Wednesday after a boiler went down, but the issue was resolved by Thursday. One of Cosmar's two lines at Carville, Louisiana, was already offline before the storm hit, but the other continued to operate, constrained only by the supply of feedstock ethylbenzene.

By contrast, the two styrene producers located in Texas Ineos Styrolution at Pasadena and Texas City, and LyondellBasell at Channelviewa shut down, and both have declared force majeure. Cosmar had declared force majeure long before the storm owing to an unplanned ethylbenzene outage.

"In general, the Louisiana plants appear to be better prepared to restart than the Texas plants," says IHS Markit. "In Texas, there are severe shortages of key utilities such as nitrogen, and to avoid overloading the utility infrastructure, plant startups are expected to be prioritized. We assume the styrene units will have to wait until the refineries and steam crackers restart. Until the styrene units can be assured of their raw material supply, benzene and ethylene, they will not restart. Our expectation is that the Texas units will be able to restart in about 1014 days from this coming weekend."

IHS Markit says the vast majority of polyethylene and polypropylene lines have been down since Sunday, and they are not expected to return to service until the middle of next week. At least half of chlor-alkali and vinyls capacity on the USGC could be out of service.

As per MRC, a winter storm has brought unusually cold temperatures, snow, and freezing rain to Texas and western Louisiana, forcing a large share of US light olefins production offline. As of the evening of Tuesday, 16 February, IHS Markit had confirmed the shutdown of at least 61% of US ethylene capacity, 59% of US chemical- and polymer-grade propylene (CGP, PGP) capacity, and 22% of US fluid catalytic cracking (FCC) capacity. Many plants that remained online were running at reduced capacity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
Author:Anna Larionova
Tags:petroleum products, PP, PE, neftegaz, petrochemistry, USA.
Category:General News
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