Latest market news

Lower prices weigh on Dow’s 4Q23 polyurethanes sales

  • Market: Petrochemicals
  • 25/01/24

US firm Dow said its polyurethanes and construction chemicals business delivered lower sales revenue in the fourth quarter 2023 compared with a year earlier, driven by a fall in prices.

Sales from the company's industrial intermediates and infrastructure segment, which includes Dow's polyurethanes business, dropped by 2pc on the year to $2.9bn in October-December 2023. Full-year sales from the segment were down by 9pc compared to 2022 at $12.5bn.

For polyurethanes and construction chemicals, prices were lower in all regions in the fourth quarter. "We continue to monitor China, where we see improving conditions, which could provide a source of demand recovery following the lunar new year," Dow's chief financial officer Jeff Tate said. But in Europe, "while inflation has moderated, consumer demand remains weak", Tate said.

A seasonal increase in demand from the de-icing sector was more than offset by lower volumes sold into the building and construction sector in the fourth quarter, Dow said. Looking forward, "increased seasonal demand for de-icing fluid is expected to provide a $25mn tailwind despite being partly offset by continued weakness in consumer durables demand", Tate said. In addition, "we expect margin expansion on higher MDI and MEG spreads as well as lower European energy costs," he added.

Dow also anticipates higher seasonal demand in the building and construction end-markets to support financial results this quarter. The construction industry is most active in the summer, and demand for chemicals such as MDI, which are used in construction materials such as insulation boards, typically starts to increase towards the end of the first quarter.

Global overcapacity in the propylene oxide (PO) market remains a challenge, said Dow's chief executive Jim Fitterling.

In "polyurethanes and propylene oxide […] we've seen capacity come on in China. We've got to see the durable goods market and the housing market come back to tighten up PO," he said. "We're watching carefully on construction chemicals demand and durable goods to see if we see an uptick there. We saw some good movement in consumer electronics and that's got me a bit optimistic," Fitterling said.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
10/07/24

Olin declares Freeport chlor-alkali FM from hurricane

Olin declares Freeport chlor-alkali FM from hurricane

Houston, 10 July (Argus) — US-based chlor-alkali producer Olin declared a force majeure (FM) on 10 July for its Freeport, Texas, plant after Hurricane Beryl caused significant damage. The company said the force majeure was for all its chlor-alkali and derivative vinyl products produced at the site. Olin said it was having difficulty accessing power, raw materials, feedstocks, and other crucial services which made managing logistics and production challenging. The company was conducting a comprehensive inspection and assessment of its facility, but there was no timeline for an end to the outage. In addition to caustic soda and chlorine, the site produces several other derivative products. The company sells spot ethylene dichloride (EDC) from Freeport to overseas vinyl producers, epoxy resin, and vinyl chloride monomer (VCM) that it supplies to Shintech by direct pipeline. Shintech buys VCM from Olin under contract to support its own polyvinyl chloride (PVC) plant in Freeport, which produces roughly 1.45mn tons of PVC per year. Shintech indicated earlier in the week it did not see any significant damage to its facility after the storm and was intending to restart its operations in short order. The Olin force majeure could hinder Shintech's Freeport operations, but Shintech has not provided a timeline for its own restart and did not respond to a request for comment. Olin also supplies Dow Chemical with chlorine by direct pipeline to run Dow's isocyanate plant in Freeport. By Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more
News

US Gulf polymer plants assessing damage: Update


09/07/24
News
09/07/24

US Gulf polymer plants assessing damage: Update

Updates paragraph 2 with information from Dow Houston, 9 July (Argus) — Multiple US Gulf coast polymer plants are assessing damage to see if they can safely restart following shutdowns prior to Hurricane Beryl, which made landfall Monday near Matagorda Bay, Texas. Dow kept its plants in Deer Park, Sabine, Texas City and Beaumont, Texas, running through out the storm, a company official said. However "high sustained winds damaged local electrical infrastructure, which is impacting some assets at our site in Freeport," the official said. The company's Seadrift, Texas, site was shut down prior to the storm's landfall, and the company has begun the restart process for that unit, the company said. Dow has approximately 1.7mn t/yr of PE capacity at its site in Freeport, Texas, as well as nearly 1mn t/yr of additional PE capacity at sites in Seadrift, Victoria, and Orange, Texas. Baystar was heard to be running two out of its three units at its Bayport, Texas, polyethylene (PE) plant, but the company was dealing with some interruptions in rail service at the site, a source said. That site has a total capacity of around 1.03mn t/yr of PE. Formosa Plastics pre-emptively shut down operations at its Point Comfort, Texas, site, which includes approximately 1.8mn t/yr of PE and 917,000 t/yr of polypropylene (PP) production. The company is monitoring the situation to assess any hurricane impacts and to "expedite the process of resuming full operations as soon as it is safe to do so," according to a release. Ineos Olefins and Polymers also shut down its PE and PP units at its Deer Park, Texas; Cedar Bayou, Texas; and Chocolate Bayou, Texas, sites, in advance of the storm. The company is currently assessing impacts to the plants themselves, as well as impacts to transportation infrastructure before restarting those units, the company said in a letter to customers. Ineos has approximately 1.1mn t/yr of PE capacity at its Deer Park and Cedar Bayou sites, as well as 586,000 t/yr of PP capacity at its Chocolate Bayou and Deer Park sites. Lyondellbasell was heard to have shut down its approximately 821,000 t/yr high density polyethylene (HDPE) plant in Matagorda, Texas, in advance of the storm. The company did not respond to requests for comment on the operational status of those and other Gulf coast units. The status of multiple other PE and PP units in the region was not immediately available. Market participants said they expect it could be a slow start-up process for many of the polymer units as facilities and many plant employees are still without power, and as companies also deal with rail and other transportation interruptions. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US PVC industry suffers little from Beryl


09/07/24
News
09/07/24

US PVC industry suffers little from Beryl

Houston, 9 July (Argus) — In the aftermath of Hurricane Beryl's landfall in Texas, most polyvinyl chloride (PVC) producers are reporting little to no damage and expect to restart paused operations in the days ahead. Formosa had [taken down] (https://direct.argusmedia.com/newsandanalysis/article/2585415) its Point Comfort, Texas, plant in the run-up to the storm, but has since reported the site is restarting after finding no significant damage. Shintech had shut its Freeport, Texas, PVC plant as a precaution after strong coastal winds from the storm initially threatened the site. As of today, the company was inspecting the site and also reported no major damage. Shintech intended to begin restarting operations soon, but gave no definitive timeline. Louisiana-based production sites for Formosa, Shintech and Westlake all managed to avoid disruptions to production and have been running smoothly. Oxy so far not responded to a request for a status report. It has PVC and vinyl chloride monomer (VCM) production in and around the Houston area at its Battleground, La Porte and Pasadena sites as well as chlor-alkali operations at the Ingleside plant at Corpus Christi. By Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US Gulf polymer plants assessing damage before restart


09/07/24
News
09/07/24

US Gulf polymer plants assessing damage before restart

Houston, 9 July (Argus) — Multiple US Gulf coast polymer plants are assessing damage to see if they can safely restart following shutdowns prior to Hurricane Beryl, which made landfall yesterday near Matagorda Bay, Texas. Baystar was heard to be running two out of its three units at its Bayport, Texas, polyethylene (PE) plant, but the company was dealing with some interruptions in rail service at the site, a source said. That site has a total capacity of around 1.03mn t/yr of PE. Formosa Plastics pre-emptively shut down operations at its Point Comfort, Texas, site, which includes approximately 1.8mn t/yr of PE and 917,000 t/yr of polypropylene (PP) production. The company is monitoring the situation to assess any hurricane impacts and to "expedite the process of resuming full operations as soon as it is safe to do so," according to a release. Ineos Olefins and Polymers also shut down its PE and PP units at its Deer Park, Texas; Cedar Bayou, Texas; and Chocolate Bayou, Texas, sites, in advance of the storm. The company is currently assessing impacts to the plants themselves, as well as impacts to transportation infrastructure before restarting those units, the company said in a letter to customers. Ineos has approximately 1.1mn t/yr of PE capacity at its Deer Park and Cedar Bayou sites, as well as 586,000 t/yr of PP capacity at its Chocolate Bayou and Deer Park sites. Dow offered no comment on its operational status beyond saying it has implemented its comprehensive weather preparedness plan and is managing accordingly. Dow has approximately 1.7mn t/yr of PE capacity at its site in Freeport, Texas, as well as nearly 1mn t/yr of additional PE capacity at sites in Seadrift, Victoria, and Orange, Texas. Lyondellbasell was heard to have shut down its approximately 821,000 t/yr high density polyethylene (HDPE) plant in Matagorda, Texas, in advance of the storm. The company did not respond to requests for comment on the operational status of those and other Gulf coast units. The status of multiple other PE and PP units in the region was not immediately available. Market participants said they expect it could be a slow start-up process for many of the polymer units as facilities and many plant employees are still without power, and as companies also deal with rail and other transportation interruptions. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Flooding closes upper Mississippi locks


08/07/24
News
08/07/24

Flooding closes upper Mississippi locks

Houston, 8 July (Argus) — High water levels in the Mississippi River have caused all lock and dams to close between Bellevue, Iowa, and Gladstone, Illinois, according to the US Army Corps of Engineers (Corps). Lock and Dams (L&D) 12-18 are closed as of 8 July, the Corps said. Water levels have reached the top of L&D 12 in Bellevue and L&D 11 in Dubuque, according to the National Weather Service. The outflow at L&D 16 was at 255,000 cubic feet per second (cfs) as of 8 July, about 68pc more than the average of 80,000cfs this time of year, the Corps said. It will be another two weeks until L&D 20 reopens, but L&Ds 11-15 could reopen as early as this weekend, the Corps said. About 15 inches of rain fell in Dubuque over the past week, bringing the expected forecast up to 22.1ft, according to the National Oceanic and Atmospheric Administration. Flooding at Dubuque and other locations along the river are expected to drop from major to moderate levels this week. L&D 19 reopened on 8 July as it fellow flood stage at 16ft, the Corps said. L&Ds 19, 21, and 22 are expected to remain open. The river widens around the locks, allowing for a greater outflow at higher water levels. By Trajan Greenwell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more