North American ethylene supply, downstream markets to suffer on after effects of Gustav and Ike

13-Sep-08

Owing to growing strength of Hurricane Ike, chemical plant owners based in Texas from Corpus Christi to Port Arthur halted operation in preparation for the season's possibly largest hurricane. The ethylene market will suffer the most from the hurricane. In all, 32 ethylene units located across Texas and Louisiana are currently shuttered including several still offline as a result of the recent Hurricane Gustav that came through the area only two weeks ago. The close down of 70% of the total ethylene plants in US and Canada will significantly affect the ethylene market. In recent decades, this is one of the largest amounts of ethylene capacity to go off stream. This major curtailment in ethylene supply could have repercussions on the downstream products and markets including a number of polymers, fibers, and higher olefins. Early in September, the ethylene market stiffened with the disruptions and shutdowns of ethylene capacity from the Hurricanes Gustav and Ike. Each of these commodities is ultimately in demand from a consumer or industrial market. There are only 46 ethylene units still in operation in all of the United States and Canada today, a decline of roughly 55 units than were present eight years ago.