Olin planning chlor-alkali turnaround in April

Olin, the world's largest chlor-alkali producer, has a month-long turnaround on tap for April at its 3 million mt/year chlor-alkali plant in Freeport, Texas, according to sources familiar with company operations.

The company did not respond to a request for comment.

That planned work is among several turnarounds in the polyvinyl chloride chain either ongoing or coming up as is normal for this time of year. The latest industry statistics show US chlor-alkali rates fell to 86% in February from 90% in January. Rates in February 2019 were 88%.

Formosa Plastics USA's 798,000 mt/year PVC plant at its Point Comfort, Texas, complex was restarting this week after planned work, while a turnaround at its upstream 753,000 mt/year vinyl chloride monomer facility at the same site was ongoing, a source familiar with company operations said. The work on both plants started at the beginning of February.

The company declined comment.

Also in April, Shintech is planning a month-long turnaround on one of the trains at its 1.4 million mt/year PVC facility in Freeport, Texas, according to a source familiar with company operations.The company did not respond to a request for comment Tuesday.

OxyChem, the chemical division of Occidental Petroleum, also has a week-long turnaround planned in April at its 1 million mt/year PVC plant in Pasadena, Texas.

The upcoming turnarounds have prompted producers to stockpile volumes ahead of time to meet contractual obligations during the work, which limits spot export volume availability, sources said.

Olin was limiting spot availability of ethylene dichloride, a precursor to PVC made by mixing chlorine and ethylene. That has allowed EDC prices to strengthen, last assessed March 10 at $275-$285/mt FOB USG, up 19% since February 11, S&P Global Platts data showed.

CORONAVIRUS COULD DAMPEN CAUSTIC SODA PRICE RECOVERY

And while Olin's work will reduce caustic soda output, market sources were skeptical of whether that would further boost prices.

Export caustic soda prices were last assessed at $230-$240/mt FOB USG, up 17.5% since February 11. However, caustic soda is a key economic indicator of industrial growth, and growing global coronavirus-related uncertainties could undercut demand that had appeared to begin recovering from a dismal fourth quarter last year, sources said.

Albert Chao, CEO of Westlake Chemical, said at an energy conference last week that chlor-alkali producers were seeing a better outlook for manufacturing and prices for commodities like caustic soda, which is a key feedstock in alumina and pulp and paper industries.

"But the coronavirus has changed that picture somewhat," he said.

While China is resuming normal activity after widespread shutdowns of manufacturing and other activity since January, "the issue now is how much the rest of the world will be impacted by the coronavirus pandemic. So far, we don't see the impact, both domestic US and export for us so far, but who knows?"

A market source noted that caustic soda's use in soap and detergent manufacturing, but that use "significantly less" than alumina and pulp and paper, both of which have been under pressure, reducing feedstock demand. Increased soap demand amid coronavirus concerns was not expected to notably impact pricing.