Braskem to idle Pennsylvania PP unit: Update

Adds background, PP buyer comment.

Braskem America confirmed today it will be idling one of its polypropylene (PP) production lines at its Marcus Hook, Pennsylvania, plant.

"To ensure the long-term resilience of Braskem America amid continuing global economic uncertainty and a trough in the chemical industry business cycle, we have made the difficult decision to implement an extended idling of one of our polypropylene production lines at our facility in Marcus Hook, PA," the company said in an email to Argus.

The plant's two production lines have combined capacity of around 455,000 t/yr. The company did not provide information on which line was being shut, or how long it would be shut.

The closure will result in a limited reduction of workforce at the plant, the company said.

Market participants said the Marcus Hook plant is one of the oldest PP plants in the US and it has feedstock limitations.

The PP market has been weak in the US for much of 2023, and new capacity that started up at the end of last year in Canada and the US has created an oversupply.

One buyer said the shutdown is not likely to significantly draw down PP inventories.

"The indications are that it is going to be pretty long for the next year or so," the buyer said.

Sources said the Marcus Hook site has faced feedstock constraints since the shutdown in 2019 of Philadelphia Energy Solutions' 330,000 b/d refinery in Philadelphia, Pennsylvania. Braskem in January 2022 said it had successfully completed the first propylene import in more than a decade to the US east coast as part of an effort to enhance feedstock options for the Marcus Hook PP plant. It is not clear whether the company has continued to import propylene to feed the facility.

In 2011, Braskem became one of the largest PP producers in the US when it purchased Dow's PP business. That purchase included Texas plants in Freeport and Seadrift, increasing Braskem's PP capacity by 50pc in the US.

Even with the closure of one of the Marcus Hook units, Braskem will still be one of the largest PP producers in the US, taking its annual capacity in the US down from around 2mn t/yr of capacity to around 1.8mn t/yr of capacity, according to an Argus database. LyondellBasell also has approximately 1.9mn t/yr of PP capacity in the US.

The plant shutdown is one of the first shutdowns in the US PP market since November 2014, when Flint Hills Resources announced it was closing its 88,000 t/yr plant in Marysville, Michigan.

By Michelle Klump