Feedstock Shortages Constrain Plant Restarts Post Ida as Companies Regain Access to Power

Petrochemical facilities in Louisiana which were shut after Hurricane Ida made landfall on August 29 as a powerful category 4 storm have started to regain access to power which has allowed some plant restarts while on the other hand, others wait feedstock supply which is critical to restart production in the closed plants. 

Shintech, the US branch of Japan’s Shin-Etsu, has shut its 1.45 million tonnes per year Polyvinyl Chloride (PVC) operations in Freeport, Louisiana due to the shutdown of Olin’s 835000 tonnes per year upstream Vinyl Chloride Monomer (VCM) Plant. Olin supplies VCM to Shintech’s plant as feedstock for PVC. 

Nova Chemical’s 977000 tonnes per year cracker in Geismar although did not lose power but had to shut down operations because of supply shortages of raw materials. 

Access to industrial gas feedstocks remained a major constraint for companies such as Westlake Chemical, Shintech, etc. 

Polyvinyl Chloride is a high strength thermoplastic material which is widely used for construction applications such as pipes, fittings, wires, and cables etc. The global demand for PVC plastic stood at 43.3 million tonnes in 2020 and is expected to grow at a healthy CAGR of 4.4% in the upcoming years. 

As per ChemAnalyst, “the feedstock shortages that have constrained production for several chemicals are expected to trigger price rise for downstream products. Prices for Polyvinyl Chloride and Chlor Alkali products have been rising already post Ida. The prices are expected to remain high for the upcoming week also as the supply shortages might take some time to fade away.”