More than 50% of North American ethylene capacity remained shut last Friday, thanks to Rita. The chemical industry is estimated to lose about 1 billion pounds of ethylene production from Rita, equivalent to the annual output at a major plant. Reduced supply is estimated to allow prices to rise faster than energy costs in Q4. Ethylene contracts in Europe are expected to settle higher than US$1,000 a metric ton in Q4, from about US$780 in Q3. This rise could be "the single largest increase in the history of European ethylene".
The markets can expect an ethylene price surge of around 54¢ this month, to continue surging this quarter since Huntsman has invoked force majeure clauses in contracts for products made at 6 Texas plants damaged by Hurricane Rita.
The following capacities are off-line because of the hurricanes:
55% of high density polyethylene capacity
46% of low-density polyethylene capacity
73% of linear low-density polyethylene output
In addition, five producers, Dow Chemical, BP's Innovene, Sunoco, Basell and Total-have declared force majeure for polypropylene.
05-Oct-05 
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