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Petrochemicals Factbox: Logistics hinder production in Texas post-Harvey

Dallas — Still bruised from Harvey's wet fists, petrochemical players along the Texas coast that did not have to shut down all their operations increasingly eyed output cuts, because power and logistics remained largely knocked out, making their own slow comebacks from the storm.

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Related content:
* Petrochemicals Factbox: Arkema reports explosions at Crosby, Texas, plant
* Oil Factbox: Gasoline prices soar on Harvey-related outages

* Natural Gas Factbox: Full market recovery seen weeks away

More than 50% of US ethylene production capacity remained offline on Thursday, and producers with full or partial operations were focused on how they would get feedstock and whether stalled logistics or spotty access to power might squeeze their ability to move output to markets.

"Port Arthur is still operating at reduced capacities, but in position to shut down if raw material supplies and access to utilities become more constrained," BASF spokesman Bob Nelson said Thursday of the company's joint-venture complex with a 1 million mt/year steam cracker.

Dow Chemical reiterated that it could cut rates at its Texas and Louisiana complexes that were operating, because of infrastructure and logistics limits.

Enterprise Products Partners, a major player in crude, petrochemical, refined products and natural gas liquids logistics, had already shut four of the eight fractionators at its operations at the largest US NGL hub in Mont Belvieu, Texas, about 30 miles east of Houston.

On Thursday, Enterprise said it may cut output further as companies throughout the supply chain struggle to resume normalcy in Harvey's aftermath.

Issues include limited access to feedstocks, consistent electric power and gaining access to facilities through floodwaters that have yet to completely recede.

Click the image to view a larger size.

Hurricane Harvey all infrastructure map


PRODUCTION


* The first of nine containers that hold decomposing liquid organic peroxides at Arkema's Crosby, Texas, site, suffered two explosions early Thursday, the company said in a statement a day after it had warned this could occur after Harvey partially submerged its operations northeast of Houston and knocked out power. The fire was contained, but more fires and explosions are expected as the volatile peroxides in the other eight containers also degrade and combust as they warm up. The plant produces liquid organic peroxides.

* ExxonMobil's olefins plant at its Baytown, Texas, chemical and refinery complex was partially operating in Harvey's wake, a spokesman said. The company shut the Baytown chemical complex and refinery as Harvey approached Houston. Elsewhere, the company shut its Mont Belvieu, Texas, polyethylene plant and was working to assess damage there. The site can produce more than 1 million mt/year of high-density and linear low-density polyethylene.

* Huntsman is on schedule to restart its Conroe, Texas, specialty chemicals site Thursday, while its complex in Port Neches, Texas, remained shut, a company spokeswoman said. The Conroe plant was put on safe-shutdown mode Monday. The site produces intermediates. Operations at Port Neches include a steam cracker with an ethylene production capacity estimated at just under 200,000 mt/year, as well as MTBE production capacity of 766,000 mt/year.

* Dow Chemical has restarted a 1 million mt/year cracker at its Freeport, Texas, complex that was shut after a lightning strike interrupted steam supply, a spokesman said.

* Olin issued a force majeure declaration on supply of products including chlor-alkali and ethylene dichloride from its Freeport complex, citing logistics constraints.

* OxyVinyls declared a force majeure on polyvinyl chloride, citing Harvey's impact on its Houston-area facilities, a source with knowledge of company operations said. The force majeure applies to PVC sold in the US and Canada, as well as PVC exports.

* LyondellBasell declared force majeure on supplies of acetyls in the USGC, market sources said. Another US producer, Celanese, placed vinyl acetate monomer supplies under force majeure Tuesday.


TABLE: Major US petrochemical complexes impacted by Harvey


PRICING


* US spot benzene reached a fresh three-month high at $2.76/gal FOB USG and 275 cents/gal DDP USG for September on the back of steady demand and a stronger energy complex. NYMEX October crude rose $1.27 to $47.23/b, while ICE October Brent was $1.52 higher at $52.38/b. US styrene prices also rose, assessed at 59 cents/lb ($1,300/mt) FOB USG, tracing surging European styrene prices. US toluene was assessed at a three-month high Thursday at $2.35/gal FOB US Gulf Coast for prompt pricing, while mixed xylenes reached a seven-month high at $2.48/gal FOB USG for prompt material. Prompt-month US spot ethylene was hovering at three-month high levels, up 0.50 cent/lb to 28 cents/lb ($617.29/mt) FD USG. Spot polymer-grade propylene remained at four-plus-month highs, steady at 43.50 cents/lb ($959/mt) FD USG.

* Occidental Chemical plans to increase caustic soda prices in the US by $80/dst, a source with knowledge of company business plans said. The off-schedule price increase is effective immediately for all spot customers, and as terms permit for contract customers, according to a customer communication obtained by S&P Global Platts.

* OxyVinyls plans to increase domestic PVC prices by 5 cents/lb for October for customers in the US and Canada, a company source said. The increase was initially communicated to customers Tuesday.

* Southern Chemical Corp. raised its September North American posted contract price for methanol by 4 cents to 114 cents/gal ($379/mt) FOB USG, it said. The increase was above market expectations, which called for postings at a rollover to slightly higher compared with August levels. SCC's rise follows Methanex's increase of 3 cents to 116 cents/gal ($386/mt) FOB USG announced Tuesday.


LOGISTICS


* The US Coast Guard opened the Port of Corpus Christi in Texas for the first time since Hurricane Harvey landed a direct hit August 25, but kept some restrictions in place because it has not finished surveying all channels and inlets in the harbor.

* The Union Pacific and BNSF railroads continue to assess damage from Harvey and are unsure when rail lines along the Texas-Louisiana coast might reopen, spokesmen for the company said Thursday.

* Some trucks were returning to roads as floodwaters receded, according to a source at a Houston trucking company that moves containerized cargo as well as big bulk items. However, he said that partial recovery was slow, with ports either shut or open only to small vessels, and with trains unable to move freely.

--Staff reports, newsdesk@spglobal.com
--Edited by Lisa Miller, lisa.miller@spglobal.com