Severe Weather Conditions are Driving up the Prices of US Polypropylene and Polyethylene

Polypropylene and Polyethylene costs in the US market were dropping at the end of 2022, and several manufacturers reduced the production rates to stabilize the declining price trend of Polypropylene and Polyethylene in the US. However, recently (end of January 2023), several American Polypropylene and Polyethylene producers started to increase the costs of products for various reasons. As an Arctic Blast moves through the US, at least two significant Polypropylene and Polyethylene in Texas have suspended operations as a precaution. Other companies are still keeping an eye on the weather.

Severe storms and tornadoes affected some petrochemical and resin companies as they moved through the greater Houston area. Following is a list of procedure hiccups as reported by a community hotline in the Houston area: Process disturbance reported and under control at Total Energies La Porte. Braskem La Porte: Due to the weather, a process Upset occurred, and the business is currently undertaking a controlled closure of the Polypropylene manufacturer. PEMEX Deer Park: Polypropylene and Polyethylene facility is having operating issues leading to flare-ups. Process Upset incident happened at the Dow Chemical Deer Park site. Shell Deer Park: The corporation reported that the bad weather brought on a problem.

The storm-related occurrences occur just as makers of Polyethylene plan to raise prices by roughly $.03 to $.05 per pound in January and again by the same amount in February. Along with the anticipated $.10/lb cost rise from the approaching January monomer contract settlement, Polypropylene producers also intend to implement $0.03/lb margin increases in January. Winter Storm Elliot in late December caused two Polyethylene producers (Chevron Phillips, INEOS) and two Polypropylene manufacturers (INEOS, Pinnacle Polymers) to declare force majeure, which resulted in a reduction in production.

According to ChemAnalyst, the prices of Polypropylene and Polyethylene in the American market are likely to increase in the following months as several manufacturers nominated another price hike for February to manage the disrupted production rates and rising demand from the downstream petrochemical industries.