Westlake to bring Lake Charles C2 plant online by end of Q1

18 February 2009 19:23  [Source: ICIS news]

HOUSTON (ICIS news)--Westlake Chemical plans to restart one of its ethylene units in Lake Charles, Louisiana by the end of the first quarter due to price increases in polyethylene (PE) and polyvinyl chloride (PVC), the Houston-based producer said in a conference call on Wednesday.

The plant has been idled since December due to falling demand.

“The operating rates in the fourth quarter were dismal,” said Westlake president and CEO Albert Chao. “People had to cut back production across the industry. Since then we’re seeing demand has come back.”

Chao pointed to the price increases in PE and PVC as evidence that the plant could come back online soon.

“The fact that a price increase can be effective means demand is improved,” Chao said. “Of course, it’s still low relative to running a plant at full capacity.”

According to global chemical market intelligence service ICIS pricing, PE prices have risen to 31.5 cents/lb ($694/tonne, €549/tonne) in February, a 3 cents/lb increase over January levels.

In addition, Westlake announced price increases in both the olefins and vinyl segments.

Although the company is restoring its Lake Charles plant and pointed to signs of improvement in January, Chao said he remained “guardedly optimistic” only for the latter part of the second quarter and beyond.

“Despite the positive signs, it is unclear how severe and how long the global recession will impact the US economy and our business,” Chao said. “Customer buying patterns declined significantly waiting for stabilisation, and we are hopeful customers will restock.”

($1 = €0.79)

For more on PE and PVC visit ICIS chemical intelligence
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By: Ben DuBose
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