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Port of Charleston. Image courtesy of South Carolina Port Authority.

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Braskem sees North American polypropylene market tight in early 2021, curbing exports

While Braskem reported its new export facilities in Charleston, South Carolina are ready and its first export shipment from there was completed, a more intense use of the $675-million facility will have to wait for domestic North American demand to diminish.

The Brazil-based company announced on Feb. 3 its “first international shipment” from Charleston. Braskem, which has five polypropylene plants in the U.S., did not provide destination or volume.

"Given the current tight North American market, we are prioritizing our domestic clients, but over time, the hub will allow us to leverage our feedstock advantaged polymer production assets in the U.S. Gulf coast, Pennsylvania, and West Virginia, to best meet our international clients needs,” said Alexandre Elias, vice president for olefins and polyolefins in North America.

According to information released in mid-2020, the facilities were set to open by September of that year and support up to 204,000 tonnes/year of shipments. The Charleston hub resulted from a five-year accord with Frontier Logistics.

Braskem has long had other shipment facilities in Houston. Braskem started up also in September a one billion pounds/year new line in Texas. Prior to that the company had 3.3 billion pounds total annual capacity.

A market source told Reuters Events early in the fourth quarter that low inventories following polypropylene exports at distressed levels in 2020 amid Covid-19 demand destruction, and because of some unrelated maintenance issues into the second half, the polypropylene market was going to be momentarily tight at least through the end of 2020.

That tightness was expected to give producers enough leverage to fill 2021 contracts at better economics. However, a supply glut combined with negative demand growth in recent years would likely begin to change the situation soon afterwards.

Unlike ethane-based polyethylene, North American-made polypropylene involves higher costs as it is based on naphtha, and it does not allow U.S. producers the possibility of any long-term strategy based on exports from the U.S., the source said.

Both of the two owners of Brazil-based Braskem, the Brazilian construction company Odebrecht that is the majority owner as well as state oil company Petrobras have started actions to sell Braskem. Odebrech said in mid-2020 that it planned sell to meet obligations to creditors. Petrobras has long wanted a sale.

U.S. chemical industry warns about Extended Producer Responsibility

The American Chemistry Council said on Feb. 3 it does not support Extended Producer Responsibility (EPR) policies, an approach to make producers financially responsible for at least part of the treatment of plastic waste, and warned against initiatives for an introduction of such legislation in as many as nine U.S. states.

"Creating an EPR program just for plastic won’t solve the waste problem and could lead to material substitutions that could cost more to produce, increase food waste or have higher lifecycle impacts such as significant increases in greenhouse gas emissions," said Joshua Baca, the association’s vice president of plastics.

"Plastic makers support fair and feasible approaches that address all packaging materials, not just plastic, and won’t unnecessarily restrict or burden consumers or lead to unintended environmental impacts," he added.

The New York Times reported on Jan. 27 that two New York State legislators have introduced a bill that would make product manufacturers responsible for recycling costs. There has been work on such legislation for over a year and an enactment of a law is possible, it said.

U.S. taxpayers pay for waste collection and recycling costs unlike citizens in parts of Europe and Canada where some forms of EPR legislations are in place, the newspaper said. New York has EPR-like laws for items like thermometers and batteries and the bill may extend that not just to plastic but also to paper, metal and glass, it said.

DuPont de Nemours sells Clean Technologies for $510 million

An international equity group will buy for $510 million in cash the Clean Technologies business of DuPont de Nemours, a joint statement said on Feb. 1.

The private equity consortium includes Broad Peak Global, Asia Green and a Saudi Arabian group, and a transaction will close by June. The unit sold produces sulfuric acid catalysts and alkylation technologies.

DuPont de Nemours has divested other businesses in recent years, including Chemours. The company has faced legal issues related to PFAS in recent years.

Canadian chemical producers see strong demand in early 2021

The Chemistry Industry Association of Canada (CIAC) anticipates strong demand in early 2021 amid inventory rebuilding.

“We are cautiously optimistic heading into 2021. We are seeing some good trends in resin markets with very robust demand down the product value chain,” says Bob Masterson, CEO of CIAC.

The final months of 2020 saw shipments of all resin and basic chemical subsectors, except for inorganic chemicals, recover to a near five–year average, the CIAC said.

In November, resin and synthetic rubber production increased 2.8% from the previous month. This was more than enough to offset a 2.6% decline in basic chemical shipments, it said.

The final months of 2020 saw all resin and basic chemical subsectors, except for inorganic chemicals, recover to nearly a five-year average.

U.S. chemical production falls in December from a year earlier, but sees on-month rise

The U.S. chemical production fell 2.7% in December compared with the same month a year earlier, according to a Jan. 28 report by the American Chemistry Council (ACC).

It was the nineteenth consecutive monthly year-over-year decline, but an improvement from earlier in 2020. Chemical production remained lower than the previous year in all regions, with the largest declines seen in the Northeast, Mid-Atlantic, and West Coast regions, it said.

Chemical production in the Gulf Coast hub fell 0.9% from December of the previous year, but rose 1.4% from November.

The $565-billion chemistry industry is one of the largest in the U.S. and provides raw materials for 96% of all manufactured goods, including foods, packaging, paints and health products, the ACC said.

By Reuters Events