US Dow to close Louisiana methylene chloride/chloroform unit

07 May 2010 22:39  [Source: ICIS news]

HOUSTON (ICIS news)--US major Dow Chemical plans to close its methylene chloride (MEC) and chloroform unit at its site in Plaquemine, Louisiana, the company said on Friday.

MEC and chloroform production were currently idled at the 195,000 tonne/year unit due to weak demand, the company said. However, it did not specify a date when operations would stop.

Dow said it had been intermittently running the unit or working with reduced rates for the past year due to sagging demand and low profitability.

The company said continued operation of the Plaquemine MEC/chloroform unit would require “significant and immediate” investment that would not make economic sense in view of the its profitability outlook.

Dow said there would be no supply disruption to contracted customers served from the Plaquemine site, as material would be sourced from either Freeport, Texas, or Stade, Germany.

Methyl chloride production and other units at the Plaquemine site would not be affected, the company said.

The Plaquemine facility was built in 1969, with the MEC/chloroform unit added in 1993, according to Dow.

MEC spot prices were last assessed at 39-43 cents/lb ($860-948/tonne, €679-749/tonne) FOB (free on board) USG (US Gulf) and 47-50 cents/lb ex-tank US east coast, according to global chemical intelligence service ICIS pricing.

MEC and other chlorinated solvents are increasingly being used in alternative formulations to replace chlorofluorocarbon (CFC) products in refrigerants.

Chloroform is a co-product of MEC.

Dow and Occidental Chemical produce MEC and chloroform in the US, while INEOS produces in Europe and routinely exports into the US. 

($1 = €0.79)

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By: Judith Taylor
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