MOSCOW (MRC) -- In line with US olefins capacity, over 80% of US polyolefins capacity was downed by the recent winter storm, said Hydrocarbonprocessing.
There remains a considerable amount of capacity offline or in the early stages of restarting a full month later. This is partly due to the limited feedstock availability for olefins monomer, comonomer, and additives in the region.
Analysis shows that US polyethylene and polypropylene operating rates fell 33% and 36%, respectively, in February. These outages coincide with domestic consumption that has remained robust through Q1 2021, sending inventory levels of both polyethylene and polypropylene into a sharp decline.
In response to the market tightness, polyolefin prices surged in February. US domestic prices for polyethylene increased to almost seven-year highs while prices for polypropylene were the highest on record, according to Wood Mackenzie’s price history dating back to 2005. We anticipate that prices will continue to be elevated over much of the first half of 2021, supported by pent-up demand related to coronavirus recovery and weather-related shortages.
As per MRC, more than 80% of US olefins capacity was immediately offline following the peak of extreme weather conditions in mid-February. During that time, Wood Mackenzie noted it could take weeks to recover given that disruptions across the value chain would lead to a staggered and complex restart, setting the stage for volatility in supply and prices amid stronger demand. As of mid-March, the US olefins industry has yet to regain its footing with only 60% of capacity back in operation, according to data from Genscape, a Wood Mackenzie company. Several facilities in both the Houston and Corpus Christi metropolitan areas remain shut. Those further west appear to be experiencing longer outages, likely due to encountering relatively colder temperatures during the winter storm.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC