A timeline of the petrochemical shutdowns since the economic downturn

Post-crash closings

25 September 2009 12:33  [Source: ICB]

Seeing the carnage laid out in a timeline is shocking, but there may be more petrochemical facility shutdowns coming in the long term

Rex Features

ALTHOUGH MUCH excess capacity has been removed from the marketplace in the wake of the global economic crisis, the prospects for more shutdowns are high, according to Robert Bauman, president of US-based Polymer Consulting International.

But the next six to eight months should be relatively quiet for plant closures, as the bulk of Middle East capacity has not yet come on stream. US exports are still strong - about 10%-15% of production - part of the reason why Netherlands-based polymers producer LyondellBasell Industries will keep running the high density polyethylene (HDPE) at the Chocolate Bayou plant (see listing opposite). "[The plant] will not shut until it becomes so uneconomical, no-one wants it," says Bauman.

Capacity reductions, though, have been helpful, "so what is operating in the US is running at high rates," he says, noting that HDPE and propylene are now tight.

He adds: "If we lose [the exports], then you start having problems." Owners will keep plants running until existing operating rates drop to around 85%, the analyst predicts.

Companies dependent on merchant feedstock - those not fully integrated, such as US-based Dow Chemical or LyondellBasell - will be more vulnerable, and producers will resist shutdowns as one company tries to outwait the other. "After about eight months, finally someone will realize they are losing too much money on this asset, and it is now a liability that needs to be shut," says Bauman.

Regarding future closures, he says: "It isn't a simple equation where you can look at a facility and shut it down because it has excess capacity. Site by site, product by product revenue/US cost: this is the analysis needed."

September 2008
The economic downturn begins.

October 2008
INVISTA, of the US, is to permanently idle 150,000 tonnes/year of bottle-grade polyethylene terephthalate (PET) capacity at its Greer, South Carolina, US, site.

November 2008
US-based Chevron Phillips idles its ethylene unit in Sweeny, Texas, US, stopping 295,000 tonnes of capacity. There is no word on when the cracker will be running again.

German chemical giant BASF has a "massive decline" in profits, and begins plant idlings, with about 80 facilities temporarily shut. Flint Hills Resources, also US, is to close its Odessa, Texas, cracker and polymer plant, losing 95,000 tonnes/year of polypropylene (PP), 195,000 tonnes/year of low density polyethylene (LDPE) and 100,000 tonnes/year of linear low density polyethylene (LLDPE).

December 2008
Dow is to close a 680,000 tonne styrene plant and a 400,000 tonne chlor-alkali facility in Freeport, Texas, US. These are the first in what Dow says will be about 20 plant shutdowns as it pursues $700m (€539m) in cost savings by 2010, which will include cutting roughly 11% of its global workforce. Meanwhile, Dow plans to idle about 180 facilities until demand returns.

France's Arkema announces 12 plants will be shut down worldwide including aluminum chloride and vinyl chloride/vinyl acetate copolymer production in France.

Georgia Gulf, of the US, says it will close its 205,000 tonne/year polyvinyl chloride (PVC) plant in Sarnia, Ontario, Canada.

Chocolate Bayou's troubles begin: LyondellBasell's subsidiary Equistar shuts down the Chocolate Bayou facility, saying it will only be temporary. The ethylene cracker there has 544,000 tonnes/year of capacity.

January 2009
US-based Sunoco is to permanently close its 200,000 tonne/year PP plant in Bayport, Texas, US. Compatriot Celanese begins the final shutdown of its Pampa, Texas, US, facility. Among its products are 290,000 tonnes of acetic acid capacity and 145,000 tonnes of acetic anhydride.

Huntsman's $150m (€102m) cost savings and restructuring program will include closing the US firm's 40,000 tonne/year Grimsby titanium dioxide plant in the UK.

March 2009
Dow says 15 plants worldwide will close as a result of redundancies following its acquisition of US rival Rohm & Haas (R&H). These include plants for herbicides and ion-exchange materials for water-filtration system, as well as R&H's Morton Salt division.

PPG Industries, also US, begins restructuring, aiming to save $140m/year. Several plant closures, including a French facility, are announced. Germany's LANXESS says part of its €250m ($366m) cost-cutting plan includes reducing products at unprofitable plants.

April 2009
INEOS Phenol, of the UK, is to mothball its 550,000 tonne/year cumene plant in Port Arthur, Texas, US.

LyondellBasell's $700m cost-cutting plan includes 14 plant closures by the end of 2010. Chocolate Bayou is now included, with its previously announced idling no longer considered temporary. Citing "enormous challenges," BASF says it will cut 2,000 jobs, and close plants.

June 2009
BASF shutters its Styropor expandable polystyrene (EPS) plant in Tarragona, Spain. With 80,000 tonnes/year of capacity turned off, the company's production capacity for standard plastic polystyrene (PS) in Europe is reduced by 15% to 540,000 tonnes/year.

SABIC plans to permanently close its 50,000 tonne/year acrylonitrile butadiene styrene (ABS) facility in Grangemouth, UK, ceasing its European ABS production.

"After about eight months,… someone will realize they are losing too much money" Robert Bauman, president, Polymer Consulting International

Japan's Mitsui Chemical is to stop production at its 115,000 tonne/year monoethylene glycol (MEG) unit in Ichihara, Japan, because of poor economics. The company projects market conditions for ethylene glycols (EGs) will become dull because of upcoming Middle East capacity.

Arkema closes its 90,000 tonne/year methyl methacrylate (MMA) plant in Carling, France.

July 2009
Global group Borealis's 625,000 tonne/year olefins cracker in Stenungsund, Sweden, goes down unexpectedly. It is unclear when it will restart. Germany's BayerMaterialScience announces the closure of a resins plant in New Martinsville, West Virginia, US, and a hydrochloric acid electrolysis unit in Baytown, Texas, US. Bayer will close and consolidate its polycarbonate (PC) unit in Berlin, Connecticut, US, into its Massachusetts site.

BASF is to sell or close 23 out of 55 former Ciba Specialty Chemical sites as part of its integration of the acquisition.

French major Total's Carling-Saint-Avold (CSA) site in France has a steam cracker explosion. Sources tell ICIS news that the ethylene and propylene units, 320,000 tonnes/year and 115,000 tonnes/year of respective capacity, are not operational, although the benzene unit is running.

Meanwhile, the company shuts a different cracker at CSA, and closes its LDPE lines in eastern and northeastern France. Spain's La Seda de Barcelona shuts its 500,000 tonne/year purified terephthalic acid (PTA) and 150,000 tonne/year PET plant at Wilton, UK.

Dow announces more shutdowns in the US and abroad, including an ethylene cracker, vinyl chloride monomer, and an ethylene oxide-ethylene glycol (EO/EG) unit at the Wilton, UK, chemical hub, with capacities of 320,000 tonnes and 275,000 tonnes respectively. Because Dow is shutting several units at Wilton, Croda, of the UK, will have to close one of its plants nearby, as Dow had been the feedstock source for Croda's facility.

August 2009
US refiner Valero will shut its 235,000 bbl/day Aruba refinery indefinitely, as the company cites low profit margins.

September 2009
Dow will close two production units in Freeport, Texas, US, by the end of the year: styrene monomer (SM) and ethylbenzene (EB). Dow would not confirm the styrene unit's capacity, but industry reports list it as 460,000 tonnes/year.

Total's closure of its Dunkirk refinery in France is projected to impact the already suffering European propylene market. The site has 90,000 tonnes/year of propylene capacity. Total says it may restart if conditions improve.

Good news! LyondellBasell will keep HDPE running at Chocolate Bayou - reversing the order to dismantle the facility. It cites rising demand in Asia for polyethylene (PE) as the reason for changing its mind. However, the plant's olefins unit will remain shuttered.

Meanwhile, LyondellBasell will close its 185,000 tonne/year LDPE unit at Carrington, in the UK, by the end of the year.

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By: Ivan Lerner
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