Producers of ethylene, chlor-alkali brace for Hurricane Francine

Petrochemical producers in the US Gulf Coast area were on high alert as Hurricane Francine approached Sept. 11.

The hurricane made landfall in southern Louisiana as a Category 2 storm, according to a 5 pm CDT update from the US National Hurricane Center.

"After landfall, Francine is expected to quickly weaken while also losing tropical characteristics. Transition to an extratropical cyclone is expected to be complete by the morning of Sept. 13," the center said Sept. 11.

The vinyls chain could be hit particularly hard: 35% of US vinyl chloride monomer capacity and 43% of US polyvinyl chloride capacity is located in southern Louisiana, as is 43% of US caustic soda capacity and 42% of US methanol capacity, according S&P Global Commodity Insights data. The region also is home to 25% of US ethylene capacity, 22% of US polyethylene capacity, 19% of US polymer-grade propylene capacity and 21% of US polypropylene capacity.

Ethylene

ExxonMobil, with 1 million metric ton/year in Baton Rouge, reported that operations continue. “We’re closely monitoring and preparing for severe weather that may impact our Baton Rouge operations. Our primary focus is the safety of our workforce and communities in the affected areas. We continue to meet customer commitments,” the company said Sept. 10.

Nova Chemicals, operating in Geismar, Louisiana, with capacity of 884,000 t/year, said Sept. 11, "we continue to monitor the status of Hurricane Francine and will assess operational impacts accordingly."

"The Louisiana area is currently at reduced rates due to the hurricane," an ethylene trader said. "We are still in a wait-and-see mode.”

Platts last assessed September spot Choctaw ethylene at 36.25 cents/lb FD Choctaw Sept 11, flat with Sept. 10.

Chlor-alkali

"Supply for EDC, VCM and caustic soda was already tight before the storm—depending on the degree of the impact to producers, we can see prices ramping up," a market trader said.

Formosa was heard to be performing soft shutting down operations in its verticalized 536,000 t/year PVC capacity plant in Baton Rouge, according to a source familiar with the company's operations.

The hurricane is also expected to pass through the region of other chlor-alkali plants, such as Westlake's Plaquemine and Lake Charles facilities with a combined caustic soda capacity of 1.826 million t/year, Olin's Plaquemine plant with a capacity of 1.070 million t/year, Shintech's Plaquemine facility with a capacity of 1.530 million t/year of caustic soda, and OxyVinyls' plants in Convent, Geismar, and Hahnville, which have a combined capacity of 1.282 million t/year of caustic soda.

Other producers in the region were heard to be operating at reduced rates, according to market participants, although this has not been confirmed by any of the companies.

Platts last assessed spot export caustic soda at $420/dry t FOB USG Sept. 10, stable on the week. US spot export EDC was last-assessed stable on the week at $240/mt FOB USG. US spot export VCM was assessed stable on the week at $550/mt FOB USG.