Shintech restores normal output at Louisiana complex: sources

Shintech has replaced a damaged transformer at its Plaquemine, Louisiana, complex and the units were running at normal rates on July 26, sources familiar with company operations said.

One of two transformers at the complex was hit by lightning and caught fire July 2, prompting the company to shut multiple units. Shintech -- the largest US producer of construction staple polyvinyl chloride -- slowly restarted shut plants days later, but ran them at reduced rates while working to replace the damaged transformer, the sources said.

"All the works completed and now back in full running," one of the sources said.

Shintech did not respond to a request for comment.

The disruption squeezed already tight supply of US PVC, which is used to make pipes, window frames, vinyl siding and other products. Export PVC prices were last assessed July 21 up $30/mt from the prior week at $1,480/mt FAS Houston on the Shintech supply uncertainty.

Export prices are 17% lower than the all-time high of $1,800/mt FAS reached late-March after a deep freeze that hit the US Gulf Coast in mid-February forced weeks-long petrochemical plant shutdowns followed by turnarounds and other operational issues.

Market participants had expected prices to continue retreating until Shintech's issues emerged.

OxyChem, the chemical division of Occidental Petroleum, also on July 23 announced a 4 cents/lb price increase for domestic PVC, while Formosa Plastics USA on July 26 announced an August price increase for the same amount, according to sources familiar with the companies' operations. The other two US PVC producers have not yet announced any August price increases for domestic material.

Neither Occidental nor Formosa responded to requests for comment.

Domestic PVC prices have gained 43.5 cents/lb ($959/mt) since June 2020 amid strong demand led by a US housing construction boom. Prices were last assessed July 21 at 89.5-91.5 cents/lb ($1,973-$2,017/mt), an all-time high since S&P Global Platts began assessing the market in 2001.

Market sources had thought that runup was cooling, as the domestic market accepted 1.5 cents/lb of 3 cents/lb producers were seeking for June, and there had been no price increase announcements for July.