US chem prices to stay firm until plants restart after Isaac - analyst

04 September 2012 16:53  [Source: ICIS news]

HOUSTON (ICIS)--US chemical prices will remain firm until crackers and chemical plants shut down for Hurricane Isaac return on line, but the overall impact of Isaac on the industry was minor, analysts said on Tuesday.

“Hurricane Isaac is likely to have minimal lasting impact to US gulf economics as there was no material damage to petchem assets,” analysts at Morgan Stanley said in a research note to clients.

“Nonetheless, prices are likely to remain firm until all crackers are back on line and the risk of logistical constraints due to flooding dissipates,” they added.

The analysts said that an estimated 4% of US steam cracking capacity is off-line but the units are in the process of restarting, or they will restart once local damage assessments are complete.

Of the 11 refineries that operated at reduced rates or shut in production, seven are operating or are in the process of ramping up production, the analysts said. As a result, spot ethylene prices increased, polymer grade propylene prices rallied, and polyethylene prices will likely settle higher.

“Going forward, the largest risk to a return to normal operations is potential logistical constraints as roads and rail lines must be inspected for structural integrity after flood waters recede,” they added.


By: Stefan Baumgarten
+1 713 525 2653



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