Brazil’s Braskem restart at Triunfo to kick off petchem hub normalization

SAO PAULO (ICIS)–Braskem has restarted operations at its Triunfo facility in the flood-hit state of Rio Grande do Sul, which will allow other players in the petrochemicals hub to start up their plants as many depend on input from the Brazilian polymers major to operate.

On Monday (20 May), Braskem said it would restart its units at Triunfo – where the producer has around one-third of its Brazilian production capacity – with the expected process to take around two weeks.

A spokesperson for Innova told ICIS that the styrenics producer’s plants at Triunfo were ready to begin operations as soon as Braskem, which supplies Innova with key feedstock benzene, had started up.

The spokesperson did not respond to questions about the financial hit Innova would suffer from the Triunfo outage, but said it had been able to its supply customers with material from its other units in Brazil.

“For polystyrene [PS], for instance, our Manaus production unit was able to absorb the tonnage previously allocated to Triunfo, so that we could avoid any negative impact on our customers,” said the spokesperson.

Meanwhile, a source at Innova told ICIS late on Monday that it aims to restart its PS, styrene, and ethyl benzene (EB) plants on 22-23 May.

However, due to low production volumes, it would be prioritizing customers in Brazil rather than exporting any material.

The restart process, however, may not be without hiccups. A source in Brazil’s petrochemicals industry said on Tuesday that highway BR-386, a 525-kilometer road linking Porto Alegre with the interior of the state as well as the south of Santa Catarina state, remains partially blocked.

“Drainage is still a problem. The blockage of the BR-386 and the lack of trucks are making distribution very difficult,” said the source.

“Yesterday [Monday], they managed to dispatch 15 trucks out of Triunfo, while the daily average on normal days stands at around 400 trucks.”

THE BEGINNING OF THE END
In what has become one of Brazil’s worst flooding disasters, the state of Rio Grande do Sul came to a standstill on 29 April with hundreds of roads blocked, widespread landslides and a dam collapse.

As of Monday, the floods had caused 157 deaths while another 88 people are unaccounted for, according to Rio Grande do Sul’s emergency services.

Over 76,000 people are still taking refuge in shelters, while nearly 600,000 have been displaced from their homes. In the 12-million people state, nearly 2.5 million have been affected by the floods which have badly hurt its economy.

Although  petrochemicals plants at Triunfo have not been damaged by the flooding, access to them became almost impossible at the peak of the crisis.

This forced companies in the hub to declare force majeure, including Braskem, Innova, and styrene butadiene rubber (SBR) producer Arlanxeo.

As of Tuesday, none of the force majeures had officially been lifted.

Indorama’s subsidiary in Brazil said it was idling its plants, although it has yet to declare force majeure.

A spokesperson for Indorama told ICIS that the situation at its plants remains unchanged from last week.

Arlanxeo had not responded to a request for comment at the time of writing.

Although petrochemical facilities at Triunfo are restarting, other industrial players are still reeling from the floods with widespread stoppages.

Earlier this week, automotive global majors Volkswagen (VW) and Stellantis said they were stopping production at some Brazilian and Argentinian plants due to a lack of input from automotive parts producers in Rio Grande do Sul.

Meanwhile, fertilizers players have said to ICIS that demand could be hit, potentially resulting in lower prices as Rio Grande do Sul is also a major agricultural state in Brazil.

Analysts at S&P Global said that while petrochemicals producers in the state may be spared from a large financial hit, fertilizers players are likely to be more negatively affected.

Front page picture: Braskem’s facilities at the Triunfo petrochemicals hub in Rio Grande do Sul
Source: Braskem

Additional reporting by Bruno Menini