US Gulf chemical spot prices mixed a week after Hurricane Beryl

One week after Hurricane Beryl swept through the US Gulf Coast region, daily polymers, aromatics and olefins spot prices remain within 11% of pre-storm levels, S&P Global Commodity Insights data showed.

However, many chemicals industry players are still assessing impacts to facilities, especially as power restoration across Texas remains ongoing. About 260,000 East Texas power customers remained offline(opens in a new tab) one week after the storm made landfall near Matagorda, Texas, 90 miles southwest of Houston, but the utility with the most outages said July 15 it expected to have 98% of affected customers back online by late July 17.

Chemicals producers Dow Chemical and Bayport Polymers saw limited physical impacts from the extreme weather, having implemented preparedness plans as Beryl approached, company spokespeople told S&P Global after the storm.

"Our sites in Deer Park, Sabine, Texas City, and Beaumont [kept] most assets running through the storm," Dow said July 11, adding the Seadrift site was safely shut prior to the storm making landfall and the restart process there has begun. High sustained winds damaged local electrical infrastructure, impacting some assets at Dow's Freeport, Texas, site, but major assets remained operational, per the company spokesperson.

Bayport Polymers' southeast Houston polyethylene facility "fared well during hurricane Beryl and all units remain operational. We were fortunate, avoiding any significant wind and water damage," the company's commercial director Brad Leesman said July 14. The company worked with the railroads prior to the storm to move product away from potential impact areas, Leesman added.

Market participants reported varied impacts to pricing and fundamentals across chemical commodities.

Some producers shut down, declare force majeure

In nylons-related news, BASF declared force majeure July 11(opens in a new tab) for polyamide 6 (nylon 6) production at its Freeport facility following Hurricane Beryl, according to a company letter seen by Commodity Insights on July 15.

Similarly, chemicals maker Olin Corp. declared force majeure(opens in a new tab) on chlor-alkali and vinyls production and aromatics shipments at its Freeport facility, according to a July 10 company statement. Market participants reported no short-term impacts, with activity halted amid the storm.

Formosa Plastics Corp. initiated a planned site-wide shutdown(opens in a new tab) at its Point Comfort, Texas petrochemical complex as a precautionary measure ahead of the storm's landfall early July 8.

"The facility did not sustain any severe damage from the hurricane and is currently in the process of returning to normal operations, anticipating a return to normal operations by the end of next week," the company said July 11 in a statement posted to their website.

Aromatics, olefins impacts vary

US ethylene and propylene spot markets saw increased prices following Hurricane Beryl(opens in a new tab), with logistical disruptions and plant operation issues exerting a slight constraint on supply throughout the week to July 12 and increasing spot activity.

Current-month spot propylene prices rose 1.5 cents/lb, or 3%, from July 3-15, Commodity Insights data showed, with current-month spot Mont Belvieu ethylene prices up 2.625 cents/lb, or 11%, over the same period.

While no direct impact on aromatics processing units has been reported, some area refineries(opens in a new tab) with capacity to produce aromatics, such as Citgo, ExxonMobil and Phillips 66, reported assessing for potential damage from the storm. No impact on xylene or toluene prices from the storm has been reported so far, with Platts spot assessments for current-month toluene and mixed xylene prices stable since end-June at 329 cents/gal FOB USG.

Spot DDP benzene prices, last assessed at 385 cents/gal July 15, are up 11 cents/gal, or 3%, from July 3, Commodity Insights data showed. It is unclear if benzene production was directly impacted by any refinery outages.

PE markets in wait-and-see mode

Polyethylene market participants in the US and Latin America reported thin activity in the days immediately following the storm, with many US producers heard to have withdrawn offers. An estimated average two to three days of production has been lost for US PE makers as a result of Beryl, US-based distributor sources said.

Spot export prices on an FAS Houston basis for low density, high density and linear low density polyethylene on July 15 were assessed stable to $22/mt higher compared to July 3, no more than a 2% increase, with FAS Houston homopolymer polypropylene levels stable since July 3.

In Brazil, prices for PE grades increased $5-$50/mt week-on-week July 10 -- no higher than a 4% uptick for any grade -- amid limited offers from the US.