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Resin price hikes may follow Gulf Coast freezing temperatures

Emergency responders, utility companies, industry and residents prepared for freezing temperatures along the Gulf Coast.

Production of some resins and feedstocks is being affected by freezing weather on the U.S. Gulf Coast, which could hit the availability of feedstocks, leading to higher prices.

Temperatures in the Houston area fell below freezing the night of Jan. 15, leading several suppliers to reduce rates or to shut down production units, according to a report from research firm ICIS. Sub-zero temperatures also are expected Jan. 20.

Ethylene and propylene units operated by Formosa Plastics Corp. USA in Point Comfort, Texas, were affected by the cold, the report said. In an email to Plastics News, Formosa spokesperson Amy Blanchett said that the firm "does not comment on operational issues or plant status unless we anticipate a substantive impact on the marketplace."

"We have procedures to address severe weather and are implementing those procedures, as necessary," she added. "If we encounter any significant issues, we will release a statement with additional information."

The ICIS report added that although materials plants were "avoiding catastrophic shutdowns" such as those related to Winter Storm Uri in February 2021, some sites had been affected as of Jan. 16. Both Ineos Olefins & Polyolefins USA and Chevron Phillips Chemical Co. had reduced operating rates. Ineos took that action on an ethylene cracker at its Chocolate Bayou plant in Alvin, Texas. No location for the CP Chem move was listed.

The report added Enterprise Products had shut down a PDH unit making propylene monomer in Baytown, Texas, and Nova Chemicals had shut down a site in Geismar, La., making ethylene, propylene and butadiene.

In an email to PN, Nova spokesperson Jennifer Nanz said that in anticipation of severe weather, the firm "accelerated the planned shutdown" of its Geismar facility for a scheduled turnaround by several days, closing it on Jan. 16. The site is expected to reopen in late March.

Formosa, Enterprise and Chevron Phillips all reported weather-related incidents to the Texas Commission on Environmental Quality (TCEQ), according to data compiled by Esteban Sagel, principal of Chemical & Polymer Market Consultants in Houston. Others reporting incidents on the TCEQ website include Bayport Polymers, ExxonMobil Chemical, Motiva Enterprises and Flint Hills Resources.

The Houston area is expected to see freezing temperatures again on Jan. 20. Cold-related shutdowns could hit the availability of ethylene and propylene feedstocks, creating the possibility of higher prices for polyethylene, PVC and polypropylene resins in January.

"My take on [weather shutdowns] is that there will be an impact on supplies, but it appears it will be fairly limited, since companies are being able to work on restarting the facilities rather quickly," Sagel said.

"There's more cold weather on the way, but no hard freezes that stay with us for several days," he added. "That was the problem in 2021."

Port Houston's terminals also were closed the morning of Jan. 16 as a precaution against icy roads leading to and from the port, according to the ICIS report.

* Source : https://www.plasticsnews.com/news/resin-price-hikes-may-follow-gulf-coast-freezing-temperatures

* Edit : HANDLER