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Freezing Fallouts in US to Push Prices of Several Chemicals Commodities to an All-Time High

  • 18-Feb-2021
  • Journalist: Jaideep Kumar

Arctic air mass blanket across the central US has compelled various US petrochemical manufacturers to declare force majeures at their petrochemical facilities. Major producers like LyondellBasell and INEOS have implemented a temporary turnaround at some manufacturing units in the US as it was getting impossible to operate the plants in such weather conditions.

LyondellBasell and INEOS recently revealed in their statements that they have been facing several challenges in operating their plants under the freezing temperatures which forced them to shut their facilities till the seasonal crises ease in the US. LyondellBasell has three Polypropylene (PP) plants located at Bayport while two are based in Louisiana. While INEOS operates three facilities of PP in Texas. Collective Polypropylene (PP) plant capacities of LyondellBasell and INEOS in the US are around 2.27 and 1.3 million MTPA, respectively.

Besides LyondellBasell and INEOS, two other large-scale petrochemical producers namely OQ Chemical Corporations and Formosa Plastics have also implemented an outage at their manufacturing facilities weighed under unprecedented weather conditions. OQ chemical’s Isobutanol and n-Butanol capacity at Bay City is numbered around 240 KTPA while its normal propanol and Butyl Acetate plant hold 250 KTPA and 140 KTPA capacity. Moreover, Formosa Plastics, an integrated producer of plastic resins and petrochemicals, has imposed a turnaround at its complete petrochemical complex in Texas which includes manufacturing facilities for Polyethylene (PE), Polyvinyl Chloride (PVC), Vinyl Chloride Monomer (VCM), Ethylene Dichloride (EDC) and chlor-alkali.

A spate of production turnarounds across US has caused a steep climb in prices of various petrochemical facilities across the globe. According to stats, since a major damage has been adhered to the PP facilities, US export prices for PP which were already skyrocketing are expected to further surge following the force majeures. On 12th February, US export prices of both homopolymer and copolymer injection grade Polypropylene have already surged to an all-time high. The indefinite turnarounds in US have also resulted in a steep climb in prices of Vinyl Acetate Monomer (VAM) in various countries including India.

As per ChemAnalyst, "since the supply shortage came as a surprise for the global market, various traders have not mounted any advanced inventories. Thus, prices of several petrochemical products are expected to rally upwards in the coming weeks as the seasonal crises in the US is expected to cause a shipping disruption for a significant span of time."

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