West coast port slowdowns disrupt some chemical markets

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HOUSTON (ICIS)–Some chemical shipments are being delayed by a labour dispute at US west coast ports, which have suspended operations for four days until Monday, industry sources said on Thursday.

“The biggest issue today is the port slowdown on the west coast.  I’m needing to purchase more domestic material than I would like just to keep the plants running,” a polyethylene terephthalate (PET) buyer said.

Several distributors of plastic resins had noted delayed shipments even before the four-day shutdown began. The ports will be closed on Thursday, Saturday, Sunday and Monday and open on Friday.

Some shipments were said to be a month late, and container rates were going up because of issues at the port as well as the upcoming Lunar New Year in China.

Still, some market sources said that this could limit some imports, particularly from Asia, which would ease some pressure on domestic suppliers to lower prices in order to remain competitive.

The port issues have slowed California sulphur shipments from the region at a time when global pricing is strong for exports. The shutdown will increase the backlog. Inventories are heard to be strong with concerns about volatile freight rates.

The region will not significantly tighten for sulphur until refineries are affected, which could happen in a matter of weeks if the ports are unable to ship petroleum coke (petcoke).

A titanium dioxide (TiO2) buyer in the paper industry has noted delays and confusion for cargoes arriving and moving through west coast ports.

“If this goes on much longer, there will be big problems,” the buyer said. “We still have some stock arriving, but inventories are getting critical.”

Another TiO2 buyer noted, however, that with the material in its low-demand season, the strike is having little impact on global availability.

The suspension of port operations, brought on by port owners and operators that are represented by the Pacific Maritime Association (PMA), will come during premium-pay weekend and holiday shifts that bring workers’ hourly rates of up to $92 after a 50% premium to normal rates, the PMA reported.

The suspension is the second consecutive weekend that ports will be shut down.

The contract negotiations have been going on for nine months without resolve between the PMA and the International Longshore and Warehouse Union (ILWU). The PMA and ILWU have accused each other of causing port slowdowns and a large backlog.

Additional reporting by Annalise Little, Feliza Mirasol, Tracy Dang, David Tonyan