Tropical Storm Isaac compounds production issues in the US

29-Aug-12

Seven years after the devastating impacts of Hurricane Katrina, the US Gulf Coast is on alert again due to Tropical Storm Isaac, which was on the verge of becoming a hurricane, according to the US National Hurricane Center. About 78% of oil production and 48% of natural gas output from the Gulf of Mexico has been shut in as Isaac was approaching, a Bureau of Safety and Environmental Enforcement report showed. This development, needless to say, has affected the olefin and polyolefin markets, adding to the number of shutdowns in the country, as per ChemOrbis. According to market sources, several producers started to announce shutdowns or reduced rates one after another early this week. Ahead of the landfall of the storm, Dow Chemical reported shutting its St. Charles complex in Hahnville, Louisiana. The St. Charles complex includes a 590,000 tpa steam cracker and polyethylene and ethylene oxide units. The company also reported that they either reduced their operating rates or shut down some units at their Plaquemine complex, which consists of two steam crackers with a combined production capacity of around 1.2 million tpa of ethylene, plus polyethylene and aromatics units. Pinnacle Polymers declared a force majeure from its facility in Garyville, Louisiana due to Tropical Storm Isaac, as per ChemOrbis. The company blamed its raw material suppliers and rail services that halted operations due to the storm. The producer owns two plants in Garyville with a combined production capacity of 450,000 tpa of PP. Williams also shut its 612,000 tpa steam cracker in Geismar early this week ahead of the storm as a precaution. The shutdown is expected to last for a week, market sources said. Many other companies are also closely monitoring the state of the storm before taking action. Monomer and polymer prices have mostly been on the rise recently in the US, supported by the availability constraints and upstream energy gains.