AFPM ’19: ITC fire puts upward pressure on US aromatics

SAN ANTONIO (ICIS)–The partial closure of the Houston Ship Channel following last week’s tank fires and chemicals leak at Intercontinental Terminals Company’s (ITC) facility in the US Gulf coast continues to exert upward pressure on US aromatics prices, sources said on the sidelines of this year’s International Petrochemical Conference (IPC).

A storage tank caught fire at ITC’s Deer Park facility in La Porte, Texas, on 17 March, spreading to several tanks containing toluene, xylenes, naphtha, gasoline blendstocks and base oils used to make machine lubricants.

The fire was extinguished on 20 March, but a containment wall was breached, and chemicals leaked into a drainage ditch that leads to the ship channel.

The fire later reignited, and a dike surrounding the fire-damaged chemical storage tanks partially collapsed.

According to the ITC’s latest media brief, the Coast Guard Captain of the Port opened the San Jacinto River for a period of time to allow vessel traffic through the channel between 17:00 and 19:00 on Sunday and between 09:00 and 12:00 on Monday. The Houston Ship Channel (HSC) remains closed to traffic between Tucker’s Bayou and HSC Light 116 and closed for cargo operations from HSC Light 139 to HSC Light 129.

Ships in the channel are nonetheless backed up, delaying imports and exports, and storage tanks are full, buoying concerns in the market.

LyondellBasell Industries’ Channelview, Texas, styrene plant remains operational amid an imminent turnaround in the market.

However, the company is “experiencing constrained barge and vessel logistics capabilities”, a company representative said.

“We are currently evaluating the impact of the ITC event on our production and logistics capabilities,” the company said.

The fire has also pushed US spot benzene prices into backwardation, with March benzene trading at a 2 cent/gal premium to April on Monday.

Overall, the fire is expected to push prices higher in the short term as industry players evaluate the long-term impact of the event on the Houston Ship Channel.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 24-26 March in San Antonio, Texas.

Additional reporting by Tracy Dang