Louisiana petrochemical producers monitoring Hurricane Ida

Petrochemical producers with operations in the path of Hurricane Ida were implementing storm preparation plans with possible shutdowns Aug. 27 ahead of the storm's landfall in south-central Louisiana, several companies said.

"I would think that given the past year, people are going to be pretty cautious and proactively shut down," a market source said.

The storm was upgraded to a Category 1 hurricane on Aug. 27, the anniversary of Hurricane Laura's landfall in Louisiana on Aug. 27, 2020, as a Category 4 storm.

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Ida's path had multiple petrochemical centers along the Mississippi River in its crosshairs, including plants operated by Dow Chemical, Westlake Chemical and Shintech in Plaquemine, Dow in Taft, Westlake and Nova Chemical in Geismar, and Formosa Plastics USA and ExxonMobil in Baton Rouge.

"We are closely monitoring the weather," ExxonMobil spokeswoman Sarah Nordin said in an email Aug. 27.

She said operations were normal, but the company was beginning its hurricane preparedness process.

All-time high resins prices

US prices for resins used to make plastics have hit all-time highs in 2021 amid high demand and supply left tight by 2020 hurricanes and later exacerbated by weeks-long shutdowns forced by mid-February's deep freeze and subsequent turnarounds and operational issues.

Market sources said Ida's fallout could push prices to higher levels on shutdowns alone, and even higher if the storm leaves damage that requires lengthy repairs.

Domestic prices for polyethylene, which is used to make the world's most-used plastics like milk jugs, grocery bags and shampoo bottles, have gained 60-62 cents/lb ($1,323-$1,367/mt) since June 2020 on strong demand.

Domestic prices for polyvinyl chloride, a construction staple used to make pipes, window frames, vinyl siding and other products, have climbed 45.5 cents/lb ($1,003/mt) since June 2020 as well, fueled by a US housing construction boom.

Multiple crackers, plants in Ida's path

Exxon's Baton Rouge chemical complex includes a 1 million mt/year cracker and three polyethylene plants with a cumulative capacity of 1.7 million mt/year.

Westlake operates two polyvinyl chloride complexes in Geismar and Plaquemine, with a combined PVC capacity of 1.38 million mt/year. The complexes also can produce up to 975,222 mt/year of vinyl chloride monomer, PVC's direct precursor, as well as 743,890 mt/year of chlorine and 782,858 mt/year of caustic soda.

Westlake spokesman Chip Swearngan said in an email Aug. 27 that in advance of a hurricane that may target a specific Westlake site, "the company would activate its hurricane plans in advance of the approaching storm and would shut down certain units, as a precautionary step."

He did not specify which units would be shut down.

Waiting to see if Ida shifts

Market sources said some producers were holding off on shutdown decisions until Aug, 28 in case Ida shifts farther east before landfall.

Dow operates two crackers each in Taft and Plaquemine with a cumulative capacity of 2.5 million mt/year, and two PE plants in Taft and three in Plaquemine with a cumulative capacity of 3 million mt/year.

And Shintech's Plaquemine complex has a 500,000 mt/year cracker, a 600,000 mt/year PVC unit and upstream units. Shintech also operates a 900,000 mt/year PVC plant in Addis, north of Plaquemine.

Previous hurricanes

All those operations were spared by Hurricane Laura, which came ashore near the Louisiana-Texas state line and hit Lake Charles head on, destroying major electricity transmission lines and forcing petrochemical plants to remain shut down for up to six weeks.

Delta's arrival along the same path in October forced shutdowns of plants that had begun restarting for up to another two weeks, though Delta was weaker and did not destroy those freshly rebuilt transmission lines.

The National Hurricane Center's forecast showed Lake Charles on the far west edge of Ida. Petrochemical centers in far southeastern Texas, such as Beaumont and Port Arthur, also were expected to get some heavy rain but be spared Ida's full strength.