Recession gulps down ethylene crackers

24 Dec '08

3 min read

Current recessionary trend is going from worse to worst. To cope with the situation, companies are slashing down their production.

A sense of financial insecurity is creeping up in the minds of the people. Manufacturers are in a terrible state due to slower demand in the market.

The present health of US economy is very critical. This is quite evident from the fact that more than eight ethylene plants of various companies are going on temporary outages, on the back of lower demand.

These plant shutdowns have impacted at least 25 percent of total ethylene production in the US.

Westlake Chemical Corporation, during last week idled one of its ethylene plants in Lake Charles, Louisiana, due to significant customer inventory destocking and weak demand for the company's derivative products.

The Company's plants have been operating at reduced rates since the third quarter of this year due to the general weakened demand as a result of the continued deterioration in the US and global economies. In an effort to manage the build up of excess inventories and to control costs the company elected to idle the ethylene unit noted above until the market and demand recover.

Equistar Chemicals, LP have temporarily idled its olefins unit at Chocolate Bayou, in Texas. The olefins unit is expected to remain out of service until sufficient demand for petrochemical derivatives resumes. This plant has a nameplate capacity of 1.2 billion pounds per year of ethylene and 725 million pounds of propylene.

Chevron Phillips Chemical in Texas is shutting down three of its plants due to continued weak demand for the monomer. One of the plants located in Sweeny 22, with a production capacity of 295,000 ton per year, has been closed an unspecified length of time. Second facility, in Cedar Bayou, of 803,000 ton per year went for maintenance shutdown on December 1. The unit is expected to be off line for up to 30 days, depending on market conditions. Another unit in Port Arthur, with capacity of 803,000 ton per year, was closed down for two months on December 15.

One ethylene cracker of Dupont with 680,000 ton per year capacity has been off line since September due to hurricane and when it is going to restart is yet unknown.

Flint Hills Resources in Port Arthur, Texas of capacity 621,000 ton per year went for a shut down for unspecified length of time on December 1. Another plant located at Odessa, TX of 348,000 ton per year is expected to shutdown permanently in the first half of 2009.

Formosa located in Point Comfort I, Texas with 680,000 ton per year capacity began 35-day turnaround in the first week of November and till date the unit remained off line.

ExxonMobil in Beaumont, Texas with 826,000 ton per year production capacity has been off line since September due to hurricane, when it is going to restart is still not known.

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