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US PTA, PET makers prep for Hurricane Florence as supply remains tight

Houston — As Hurricane Florence appeared to head toward the US East Coast, some local PET makers were heard to be in the process of shutting units in preparation.

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DAK Americas plans to shut its 660,000 mt/year plant in Charleston, South Carolina, a person with knowledge of company operations said. Its 1.3 million mt/year plant in Columbia, South Carolina, was operational as of time of publication, while the status of its Fayetteville, North Carolina, plant could not be immediately verified.

Nan Ya's 1.2 million mt/year plant in Lake City, South Carolina, was operational as of time of publication, a source with knowledge of operations said. Calls to Indorama, which operates capacities at Asheboro, North Carolina and Spartanburg, South Carolina, were not immediately returned.

"Anything on the East Coast will likely be shut," one source told Platts.

Upstream, production of purified terephthalic acid, a precursor to PET, was likely to be affected as well. BP has a 1.5 million mt/year plant at Cooper River, South Carolina, although the operational status of that plant was not immediately known, and BP could not be reached for comment. Production at BP's Cooper River site has been constrained with a sales allocation in place for most of the summer. Allocation levels were last heard in H1 August at near 90% and it was not clear if the allocation had been lifted.

Additionally, DAK Americas has a 600,000 mt/year PTA plant at its Columbia site, which was operational as of time of publication.

PTA supply in North America has been extremely tight due to the BP allocation as well as an unplanned outage due to a fire at Alpek's world-scale PTA facility in Altamira, Mexico. A restart date was not immediately clear.

With PTA supply tight and feedstock PX prices surging, PTA contracts rose 2.85 cents in August to settle at 52.87 cents/lb. Sources anticipated further price increases for September, with estimates putting the contract up as much as 7 cents/lb. The higher PTA prices led PET makers to push for September price increases of 5-7 cents/lb and contracts were last settled at $1,884/mt.

Sources noted that any supply disruptions for PTA and PET as a result of the hurricane could support further price increases.

--Kevin Allen, kevin.allen@spglobal.com

--Bernardo Fallas, bernardo.fallas@spglobal.com

--Edited by Pankti Mehta, pankti.mehta1@spglobal.com