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FACTBOX: Lake Charles chemical producers shut down operations ahead of second hurricane in six weeks

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FACTBOX: Lake Charles chemical producers shut down operations ahead of second hurricane in six weeks

Houston — Lake Charles, Louisiana, chemical producers were bracing Oct. 8 for the second hurricane to blow through their region in six weeks.

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LyondellBasell informed customers that the company was idling its polypropylene plants in Lake Charles ahead of Hurricane Delta's expected Oct. 9 landfall after recently having restarted them in the wake of Hurricane Laura's Aug. 27 assault.

Sasol shut down units that had been restarted after Laura's arrival as well, spokeswoman Kim Cuismano said in an email Oct. 8.

"We will resume the coordinated startup sequence when it is safe to do so," she said. "This will depend on impacts of Delta as well as power supply and feedstock availability."

Other Lake Charles chemical producers, Westlake Chemical and Lotte Chemical, did not respond to inquiries about the state of their operations, most of which had yet to begin to restart or fully restart in Laura's aftermath. However, market sources and some sources familiar with company operations expected plants to remain shut down until Delta passes.

"Nobody can afford to make a wrong decision on this," a source said.

Multiple sources familiar with Westlake's operations said the company was shutting down several plants that had restarted, including three chlor-alkali units, crackers and polyethylene facilities.

Force majeures declared before and after Laura's arrival remained in effect on Oct. 8.

LyondellBasell's customer letter dated Oct. 8 noted that its FM on polypropylene remained in effect, and "any loss of production due to Hurricane Delta will further constrain our ability to meet planned order ship dates and our ability to restock our distribution centers."

Delta's expected path nearly mirrored that of Laura, with landfall expected in east Cameron Parish just south of Calcasieu Parish, home to Lake Charles. Local officials issued mandatory evacuation orders for both parishes on Oct. 7.

Laura came ashore as a Category 4 storm packing 150 mph winds that severely damaged major electricity transmission lines that had to be rebuilt.

Delta was a Category 2 storm with 105 mph winds, but local officials said the region remained vulnerable in Laura's wake.

"You need to evacuate. You need to leave southwest Louisiana. You need to leave Lake Charles," Mayor Nick Hunter said during a briefing Oct. 8. "We just went up against the strongest hurricane to hit the state of Louisiana in 150 years."

Here are operations and pricing effects ahead of Hurricane Delta's landfall:

FORCE MAJEURES

**CP Chem: FM declared Sept. 1 on US polyethylene.

**Westlake Polymers: FM declared Aug. 31 on US polyethylene.

**Sasol: FM declared Aug. 31 on all North American polyethylene, including all LLDPE and HDPE grades.

**Westlake Chemical: FM declared on Aug. 31 on all North American PVC and VCM.

**LyondellBasell: FM declared Aug. 31 on US polypropylene.

**INEOS Olefins & Polymers USA: FM declared Aug. 26 on HDPE at 460,000 mt/year unit in La Porte, Texas; plant is a joint venture with Sasol.

**Formosa Plastics USA: FM declared Aug. 14 on PVC at its Texas and Louisiana operations; unrelated to Hurricane Laura.

SHUTDOWNS

Lake Charles

**Sasol: 1.5 million mt/year and 439,000 mt/year crackers; 470,000 mt/year LLDPE; 380,000 mt/year ethylene oxide/monoethylene glycol; a new 420,000 mt/year LDPE plant slated to start up in October. Shut down units that had restarted post-Laura; others remained shut.

**Westlake Chemical: three chlor-alkali plants, combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda; two vinyl chloride monomer plants, combined capacity of 952,543 mt/year; a 1.8 million mt/year ethylene dichloride plant; two crackers, combined capacity of 1.19 million mt/year; 200,000 mt/year LLDPE; 60,000 mt/year HDPE/LLDPE; 386,000 mt/year LDPE; 258,547 mt/year styrene. Shutting chlor-alkali and PE plants and crackers that had restarted post-Laura, other units had remained shut.

**Lotte Chemical: 1 million mt/year joint-venture cracker; 700,000 mt/year MEG plant. Had not restarted post-Laura.

**LyondellBasell: 400,000 mt/year and 1 million mt/year PP plants. Assessing damage. Had restarted both plants; shutting down as of Oct. 8 ahead of Delta's landfall.

Geismar, Louisiana

**NOVA Chemical: 928,000 mt/year cracker shut mid-September for unplanned repairs unrelated to storms; postponing restart until after Delta passes.

MONITORING

Orange, Texas

**Dow Chemical: 882,000 mt/year cracker; 236,000 mt/year LDPE; reducing staff to essential personnel on Oct. 9.

**CP Chem: 420,000 mt/year HDPE.

PRICES

**US spot ethylene prices saw a boost from Delta's approach. The FD Choctaw marker rose 0.75 cent to 26 cents/lb, its highest level since being assessed at 28.75 on Sept. 29. The Choctaw price reached 30.5 cents.lb Sept. 22-24 after NOVA shut its Geismar cracker for unplanned repairs on top of the Lake Charles ethylene outages.

PORTS AND RAILROADS

**Port of Lake Charles: Closed to all inbound vessel traffic; to shut down completely by 8 pm CT Oct. 8.

**Ports of Port Arthur, Orange, Sabine and Beaumont, Texas: Closed to all inbound vessel traffic; to shut down completely by 8 pm CT Oct. 8

**Houston Ship Channel: Open to vessel traffic, though cargo operations suspended and preparations for storm surge and strong winds underway.

**Union Pacific: City of New Orleans' closure of flood gates Oct. 7 stopped interchanges with eastern rail carriers; preparations underway for any potential Delta-related outages

**BNSF: New Orleans's flood gate closure Oct. 7 ceased interchanges with eastern carriers; holding all New Orleans-bound trains and rerouting traffic as needed; preparations under way for potential outages