The outages are tightening international markets which
have been already struggling shortages of fabric
and rising costs. Issues with the worldwide
container delivery system, plant outages plus
wholesome downstream demand have brought on
tightness, notably down the propylene and
polyethylene (PE) chains.
Propylene and PP are prone to be one of many
hardest-hit by the storms as a result of the market
was already in turmoil.
The coronavirus pandemic has diminished
demand for transport fuels, and led to grease
refineries closing or slicing manufacturing,
significantly in Europe and the US.
These closures had a knock-on impact on provide
of propylene and PP, main to cost spikes.
With US PP manufacturing capability so extremely
focused on the Gulf Coast, even
quickly constrained productions
capabilities can have a large impact on an
already tightly provided market.
US propylene costs are at
10-year highs and inventories are roughly
half of what they have been a yr in the past. Consumption
has outpaced manufacturing as a consequence of diminished
propylene manufacturing during the last yr.
PP inventories within the US hit seven-year lows in
late 2020, partially pushed by rebounding
demand and partially pushed by restricted monomer
availability. Some PP manufacturing points additionally
preceded this climate occasion.
The state of affairs is much less dramatic in PE.
Constrained provide and demand for packaging has
sustained international markets by the pandemic,
with logistics challenges and outages inflicting
shortages and worth spikes in 2021.
With nearly two thirds of US ethylene capability
now offline, international PE markets are prone to
tighten additional.
US methyl methacrylate (MMA) provide can be
anticipated to be
further constrained due to the storm, as
Lucite has taken down its plant in Beaumont,
Texas. Extreme constraints in feedstock acetone
proceed to restrict manufacturing. Because of excessive
prices, a producer is heard to be levying a
non permanent acetone surcharge on orders beginning
this month.
GLOBAL MARKET IMPACT
With
the Chinese language New 12 months holidays coming to an finish
from 17 February, demand is selecting again up in
the world’s largest chemical compounds market.
ICIS reported as we speak {that a} provide scarcity and
enhancing demand after the vacations, supported
China’s polyolefins market, resulting in a surge
in futures and spot costs.
Futures costs in China additionally rose sharply for
styrene, mono ethylene glycol (MEG), polyester
and polypropylene.
