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Petrochemicals Factbox: Braskem Increasing Resin Imports to Supplement US Market

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Petrochemicals Factbox: Braskem Increasing Resin Imports to Supplement US Market

Brazil's Braskem is increasing resin imports to the US in Hurricane Harvey's aftermath, a move aimed at helping fill any supply gaps as Texas Coast plants shut for the storm work to restart, Braskem America CEO Mark Nikolich said Friday.

Between the company's plants in Brazil and Mexico, Braskem can use its inventory and supply chain to help replenish US stocks in the short term, Nikolich said in an interview.

"We have been importing ratably from Brazil for over two years now," he said. "This is just continuity of those operations. We can rely on those assets to support us in a larger way."

Braskem Idesa, the company's joint-venture complex in Mexico, also has temporarily reduced the amount of polyethylene made available to the spot market to ensure its domestic Mexican customers and those with contracts for exports get the supply they need until US producers that idled operations for Harvey fully restart, he said.

Texas Coast shutdowns peaked with about 60% of ethylene capacity offline and roughly a third of polyethylene output idled. Railroads, critical to moving plastic pellets to packaging companies for transport, also shut much of their Texas Coast operations and ports from Corpus Christi to far-Southeast Texas were shut for up to a week or more.

Ports have reopened with varied draft limits and railroads have largely restored operations in the Houston area and far southeast Texas as plants initiated restarts or continued post-storm assessments.

Production

* Braskem this week restarted its 336,000 mt/year polypropylene plant in Freeport, Texas, which was running at full capacity on Friday, Nikolich said. The company's 227,000 mt/year PP plant in Seadrift, Texas, was on "hot standby" on Friday, meaning systems were on and ready to begin producing as Braskem awaited full restoration of necessary third-party utilities and infrastructure, he said. The Seadrift plant is about 49 miles from where Harvey made its initial landfall late August 25 as a Category 4 hurricane. Braskem's 354,000 mt/year PP plant and new ultra-high molecular weight polyethylene, or UTEC, plant in La Porte, Texas, along the Houston Ship Channel, operated throughout Harvey's assault.

* DuPont's 235,870 mt/year polyethylene plant at its chemical complex in Harvey-battered Orange, Texas, is expected to be restarted within a week, but the company is not yet certain when it can restart its 680,000 mt/year steam cracker there, Mike Hiteshew,global digital marketing leader for DuPont, Said on Friday. He also said the company's 131,997 mt/year PE plant in Victoria, Texas, should restart by mid- to late next week. The Victoria plant was already offline for maintenance when Harvey came ashore, and crews were repairing Harvey-related damage ahead of restart. Hiteshew said the company remains concerned about access to ethylene to feed the PE plants as crackers work to restart post-Harvey. Outages peaked at More than 60% of US capacity in Harvey's wake.

* Flint Hills Resources was restarting its steam cracker in Port Arthur, Texas, which was shut as Harvey inundated the Texas Coast more than a week ago, a regulatory filing showed Friday. The restart process for the Light Olefins Unit was expected begin as early as Friday and last through September 22, the filing with the Texas Commission on Environmental Quality showed. The steam cracker has an ethylene capacity of 634,000 mt/year and a chemical-grade propylene capacity of 317,000 mt/year. The Kansas-based company shut the cracker on August 29 due to Harvey, the filing said.

* ExxonMobil had restarted all operations at its Baytown olefins plant on Friday, and was continuing to increase output while resuming normal production rates, a spokesman said in an email. Exxon has 2.1 million mt/year of ethylene capacity at Baytown. Exxon's restart of more than 1 million mt/year of PE capacity in Mont Belvieu, Texas, was ongoing on Friday, as was the restart of its Beaumont chemical complex, with an 827,000 mt/year cracker and a 1 million mt/year PE plant.

* Shintech plans to raise US polyvinyl chloride prices by 5 cents/lb in October, a source with knowledge of company operations said Friday. Shintech is the third US producer to announce an October increase. OxyVinyls and Westlake Chemical also said over the past week that they will increase prices by 5 cents/lb on October 1, company sources said. The latest announcement comes amid ongoing tightness and upstream issues that were impacting the market in the wake of Hurricane Harvey, as well as expectations that domestic demand could pick up for construction-related PVC products in Texas, and potentially in the Southeast US depending on the impact of Hurricane Irma, which was bearing down on Florida on Friday.

* Shell on Friday was initiating restart of its Deer Park chemical complex on the Houston Ship Channel after shutting it nearly two weeks ago because of Harvey, a spokesman said. "We have assessed and confirmed the suitability of our site’s infrastructure and production units to transition into restart activities, which are starting now," spokesman Ray Fisher said in an email on Friday. The complex has an 836,000 mt/year cracker.

 

Table: Major US Petrochemical Complexes Impacted by Harvey

Company Location Ethylene KT/YR Status
ExxonMobil Baytown Baytown, TX 2,143 Partially operational
Dow Chemical Freeport Freeport, TX 1,000 Restarted 31-Aug
BASF/Total Port Arthur Port Arthur, TX 1,073 Reduced rates 30-Aug
CP Chem Port Arthur, TX 830 Shut 30-Aug, restarted
DuPont Orange, TX 680 Shut 30-Aug
ExxonMobil Beaumont Beaumont, TX 827 Shut 29-Aug, restarting
Flint Hills Resources Port Arthur, TX 623 Shut 29-Aug, restarting
Huntsman Port Neches Port Neches, TX 200 Shut 28-Aug, restarting
LyondellBasell Channelview, TX 2,820 Reduced rates 27-Aug
LyondellBasell La Porte La Porte, TX 1,155 Shut 27-Aug
Ineos Chocolate Bayou Alvin, TX 1,820 Shut 27-Aug; restarting
Shell Deer Park Deer Park, TX 836 Shut 27-Aug; restarting
CP Chem Sweeny Sweeny, TX 1,946 Shut 27-Aug; restart by mid-Sept
CP Chem Cedar Bayou Baytown, TX 1,026 Shut 26-Aug, assessing
LyondellBasell CC C.Christi, TX 1,134 Shut 25-Aug
OxyChem-Mexichem Ingleside, TX 550 Shut 24-Aug; planning restart
Formosa Plastics P. Comfort, TX 1,499 818 cracker restarted

 

Table: Force Majeure Declarations to Date

Company Product(s) Location Date
LyondellBasell Acetic acid La Porte, Texas 31-Aug
Olin EDC Freeport, Texas 31-Aug
Olin Chlor-Alkali Freeport, Texas 31-Aug
OxyVinyls PVC Deer Park, Texas 31-Aug
OxyVinyls PVC Pasadena, Texas 31-Aug
Ascend Acrylonitrile Alvin, Texas 29-Aug
Celanese VAM Pasadena, Texas 29-Aug
CP Chem HDPE Cedar Bayou, Texas 29-Aug
CP Chem HDPE Orange, Texas 29-Aug
CP Chem HDPE Pasadena, Texas 29-Aug
CP Chem LDPE Cedar Bayou, Texas 29-Aug
CP Chem LLDPE Cedar Bayou, Texas 29-Aug
Formosa Chlor-Alkali Point Comfort, Texas 29-Aug
Formosa PVC Point Comfort, Texas 29-Aug
LyondellBasell Benzene Channelview, Texas 29-Aug
LyondellBasell Ethylene Glycol Bayport, Texas 29-Aug
LyondellBasell Ethylene Oxide Bayport, Texas 29-Aug
LyondellBasell IPA Channelview, Texas 29-Aug
LyondellBasell Propylene glycol Pasadena, Texas 29-Aug
LyondellBasell Styrene Channelview, Texas 29-Aug
Total PP La Porte, Texas 29-Aug
Equistar Chemicals HDPE Matagorda, Texas 28-Aug
Equistar Chemicals HDPE Victoria, Texas 28-Aug
Equistar Chemicals HDPE Alvin, Texas 28-Aug
Equistar Chemicals HDPE LDPE, LLDPE La Porte, Texas 28-Aug
Formosa Plastics HDPE, LLDPE Point Comfort, Texas 28-Aug
Formosa Plastics PP Point Comfort, Texas 28-Aug
Formosa Plastics PVC Point Comfort, Texas 28-Aug
Formosa Plastics Chlor-alkali Point Comfort, Texas 28-Aug
Ineos PP La Porte, Texas 29-Aug
Ineos PP Alvin, Texas 28-Aug
Ineos HDPE Alvin, Texas 28-Aug
Ineos Acrylonitrile Green Lake, Texas 04-Sep

 

Pricing

* US spot polymer-grade propylene closed the week at 5-month highs, assessed Friday at 44.5-45 cents/lb FD USG for prompt-month (September) deliveries Pricing was up 0.5 cent day on day and up 1.25 cents/lb week on week. Spot refinery-grade propylene rose 2.125 cents/lb day on day and 3.375 cents/lb week on week to 34.625-35.125 cents/lb FD USG on a 3- to 30-day basis, also at a 5-month high. In polymers, spot polyethylene export assessments were mostly stable week on week amid limited activity. High-density blowmolding was at $1,212/mt (55 cents/lb), up $11 week on week and $121 since August 23, as PE pricing was the highest since late Q1-early Q2 2017. Spot polypropylene for export was stable at $1,234/mt (56 cents/lb) FAS Houston, stable day on day and week on week at near five-month highs. US ethylene spot pricing closed the week at 7-month highs, assessed Friday at 30.5-31 cents/lb FD for prompt-month deliveries, up 0.875 cent/lb on the day and 1.25 cents/lb on the week. September was heard traded Friday at 30.25 cents/lb MtB Nova after it had traded at least five times at 30 cents/lb MtB Nova in the morning. October was heard traded Friday at 31.25 cents/lb MtB Nova after it was heard traded at 31 cents/lb MtB Nova. Continuing the trend of the recent week, trading activity was beginning to resume typical levels, after thin activity stemming from uncertainty about Harvey impact. US Gulf Coast MTBE fell 1.89 cents day on day and 10.42 cents week on week to be assessed Friday at 196.89 cents/gal FOB USG. The USGC discount to Europe dissipated Friday, with pricing at parity. Prompt availability in the USGC market is limited due to Harvey-related logistical limitations.

Logistics

* Ports in Houston, Freeport, Beaumont, Port Arthur and Orange remained open with varied draft limits as crews continued assessments of submerged Harvey-related debris.

* Union Pacific and BNSF had largely restored routes knocked out of service by Harvey, though repairs continued on some affected track, bridges and signals.