To: robert b furman who wrote (19861 ) 9/3/2017 7:03:15 AM From: John Pitera 4 RecommendationsRecommended By
Read Replies (2) | Respond to 57% OF THE US ETHYLENE IS OFF LINE AND NOT BEING PRODUCED --AS PER CNBC AT THEIR 4:25 pm BROADCAST ON FRIDAY....... endangered the supply of the world's most important chemical nearly three quarters of America's most basic chemical building blocks used in plastics As it turns out, this colourless, flammable gas is arguably the most important petrochemical on the planet -- and much of it comes from the hurricane-stricken Gulf Coast. Hurricane Harvey in the chemical communities along the Gulf is likely to ripple through US manufacturing of essential items from milk jugs to mattresses. “Ethylene really is the major petrochemical that impacts the entire industry, ” said Mr Kothari, an analyst at consultant Nexant. Texas alone produces nearly three quarters of the country’s supply of one of the most basic chemical building blocks. Ethylene is the foundation for making plastics essential to US consumer and industrial goods, feeding into car parts used by Detroit and diapers sold by Wal-Mart Stores. With Harvey’s floods shutting down almost all the state’s plants, 61 per cent of US ethylene capacity has been closed, according to PetroChemWire. Ethylene occurs naturally -- it’s the gas given off by fruit as it ripens. But it also lies at the heart of the $3.5 trillion global chemical industry, with factories pumping out 146 million tons last year, Kothari said Thursday. It helps combat global warming with polystyrene foam insulation and lighter, fuel-saving plastic car parts hen steam heating it to 816 Celsius inside massive furnaces that crack apart the molecular bonds. Ethylene and its derivatives account for about 40 per cent of global chemical sales , said Hassan Ahmed, an analyst at Alembic Global Advisors. The US accounts for one of every five tons on the market, and e thylene plants globally were running nearly full out to meet rising demand before Harvey, he said. “So any little hiccup -- and this is much beyond a hiccup -- will dramatically tighten supply-demand balances,’’ Ahmed said Thursday. While Gulf Coast chemical plants are designed to withstand hurricane-force winds and floods, Harvey has thrust the industry into uncharted territory. Ethylene producers hit by the storm along the Texas Gulf Coast include LyondellBasell Industries at the southern end in Corpus Christi, Exxon Mobil in Baytown outside Houston , and Chevron Phillips in Port Arthur by the Louisiana border. “The combination of Harvey’s path, duration and rainfall total is wreaking havoc with the supply side of the US chemicals industry on an unprecedented scale,” said Kevin McCarthy, an equity analyst at Vertical Research Partners. “We certainly haven’t seen anything quite like it in our 18 years of following chemical stocks on Wall Street.” The sudden dearth of ethylene and other materials is being felt up and down the supply chain. More than half of the country’s capacity for making polyethylene plastic has been shut down in the past week. More than 60 per cent of production of polypropylene -- another plastic, has been curtailed. demand for natural gas has plummeted. Producers such as Dow Chemical use gas as a raw material for ethylene and also to power their massive cracking furnaces and other equipment. Added to the impact from widespread electricity outages, demand for gas fell by more than 5 billion cubic feet a day, according to Citigroup. T hat’s equal to nearly 8 per cent of the country’s normal consumption this time of year. Demand for other key raw materials used to make ethylene, such as ethane and butane, have fallen about 90 per cent because of plant closures, according to PetroChemWire. http://www.independent.co.uk/news/business/news/hurricane-harvey-ethylene-supply-endanger-chemical-world-most-important-gulf-detroit-car-parts-a7923551.html
