How Will Coronavirus Affect Chemicals?

February 7, 2020

China, a major player in global economies, is in the throes of health crisis- Coronavirus. As they strive to contain the virus, the government has taken measures such as extending the Chinese Lunar New Year to keep people away from workplaces, and imposing travel bans that have left millions in lockdown. Millions more cautious and sensible citizens are just staying home.

Here are some of the ways the crisis is affecting chemical markets:

  • Production Offline: Chemical production plants are offline, due to the government directive to extend the Lunar New Year break.
  • Demand for Chemicals: Employees that use chemicals at manufacturing plants aren’t at work either. This is reducing overall demand for chemicals.
  • Reduced Feedstock: Oil refineries are cutting back, which reduces the feedstock for petrochemical plants.
  • Rising Inventory: Storage warehouses are full, so plants are cutting production.
  • Shipping & Receiving: Due to travel restrictions, normal shipping and receiving of materials is hindered.
  • Fuel Demand: With significantly reduced travel, demand for fuel is down. Oil prices are falling.
  • Missing Employees: Production in plants in China may be reliant on migrant workers, who are hindered from getting to work due to travel bans.
  • Demand for Hygiene Products: Increased usage of household cleaners, disinfectants, and hygiene products has increased the demand for chemicals used in these products.
  • Overall Economic Activity Down: Holiday spending in China was much lower this year than normal.

It remains to be seen what the long term impact of this will be on chemical markets. Regardless, the supply chain team at CORECHEM is committed to minimizing the impact of the crisis for our customers by multi-sourcing our product offerings. Reach out to your sales representative for further questions you may have about how the Coronavirus crisis could affect you.

Saudi Arabia Attack: Global Crisis or Weekend Panic?

September 17, 2019

Last weekend, major Saudi Arabian oil processing facilities were attacked in an ongoing feud within the region. Drones and missiles, of disputed origin, shut down half of Saudi Arabia’s production capacity, or approximately 5% of the global daily supply.

How much of a disruption to crude oil supply and downstream chemical markets will this be?

That’s a good question.

Initially, the crude oil market was in shock. Oil prices spiked. Analysts predicted a recovery period of months, and the U.S. President authorized the use of the U.S. Strategic Petroleum Reserve if necessary.

Now, however, Saudi Arabian officials are saying that production is fully back online after the weekend attacks. Oil prices are dropping, and the U.S. President has stated that he does not think the use of America’s oil reserve will be necessary.

Regardless, the effect of this large scale disruption could potentially be felt for some time. Major chemical producers have announced increases on some organic chemicals. Here are just a few of the crude-derived chemicals that could potentially be affected:

  • Toluene 
  • Xylene
  • Mineral Spirits
  • Hexane
  • Heptane
  • Isopars
  • Aromatic Solvents

With further questions about how this event may effect you, contact your CORECHEM Sales Representative today!

U.S. Becomes a Global Leader in Methanol Production

August 20, 2019

New Methanol plants continue to be fired up in the U.S., despite the oversupply seen in the domestic Methanol market. The global market, for use in applications such as chemicals, plastics, and fuel, is sparking increased export demand for Methanol, and the low cost of the raw material natural gas makes the U.S. the ideal production location.

The Gulf Coast is home to most of the country’s Methanol plants, due to ease of access to both raw materials and major consumers such as China. The largest production facility in the country, Natgasoline, opened there last summer, with two more plants slated to open on the Gulf by the end of 2020. Big Lake 1 and Yuhuang’s St. James 1 plant will increase total U.S. Methanol capacity by a whopping 45%. Major producer Methanex recently announced their decision to build a third Methanol plant, Geismar 3, to begin operations in 2022. This plant will be dedicated 100% to export Methanol. A Liberty One plant in Brazil was deconstructed, moved, reconstructed in West Virginia, and expects to begin production in early 2020.

With the Asia / China fuel market and MTO (Methanol To Olefins) considered a sure bet for Methanol demand, United States is becoming a global leader in Methanol production, and is fast becoming a net exporter of Methanol.

This significant new production capacity is fueling an oversupply situation in the United States. According to the Methanex price index, Methanol prices are currently at a near three year low, after peaking in November of 2018.

CORECHEM looks forward to supplying your Methanol needs! View our Methanol product offering here.

UPDATE: ITC Deer Park Terminal Resumes Operations

June 6, 2019

A fire at the ITC Deer Park terminal in mid-March affected both supply and price of several commodity chemicals. Following a weeks-long cleanup process, in which over 20 million gallons of oily water were removed from the water and tank farm, the docks at ITC were approved for use in the first week of May. In addition, rail, truck & pipeline activity has resumed.

The reopening of shipping operations at the ITC Deer Park facility, a major storage facility for petrochemicals near Houston, TX, is normalizing supply chains of commodity chemicals such as Isopropyl Alcohol (IPA) and Methyl Ethyl Ketone (MEK).

CORECHEM looks forward to supplying your company! Contact your sales representative with questions about how this may affect you.


U.S. Sodium Hydroxide Flows Into South America

June 4, 2019

U.S. exports of Sodium Hydroxide to Brazil have just increased exponentially. The crumbling Pinheiro neighborhood, and the world’s largest alumina refinery, are the reason why.

Petrochemical producer Braskem in Brazil has recently shut down salt mining operations following a governmental report citing the salt mines, combined with heavy rainfall, to be the cause of geological instability in the Pinheiro neighborhood.

Because salt is necessary for the production of Sodium Hydroxide, Braskem has subsequently declared force majeure and has begun importing product from the U.S. to fulfill contracts.

Another company in Brazil, aluminum producer Norsk Hydro, has begun importing a significant amount of additional Sodium Hydroxide from the U.S. A government-issued production embargo issued due to environmental concerns has recently been lifted. The Alunorte alumina refinery is allowed to run at full capacity after over a year of only being allowed to run at half capacity. Alumina production is one of the biggest consumers of Sodium Hydroxide in the world.

These additional significant exports to South America, combined with additional exports to Latin America, the Middle East and Asia (due to new alumina operations) are squeezing U.S. Sodium Hydroxide inventories. Domestic demand for Sodium Hydroxide is increasing as well. Meanwhile, several major U.S. producers have planned outages in the near future.

As a result of the shifts in the market, U.S. producers have announced increases. According to market prognosticators, there is a possibility that a portion of the increases could materialize in the third quarter. With questions about how this could affect you, reach out to your sales representative.



Tariff Hike Will Affect Chemicals

May 10, 2019

Last night, tariffs on 200 billion dollars worth of material imported from China increased from 10% to 25%.

U.S. China Trade War

The increase does include a number of commodity chemicals, and is likely to affect the global market. A few chemicals that could be potentially impacted are:

  • Sodium Hydroxide
  • Titanium Dioxide
  • Acetic Acid
  • Phosphates

For the complete list of items affected, see Tariff List-09.17.18.

CORECHEM continues to monitor the effect of the tariffs on commodity chemicals, and we have already taken steps necessary to minimize the impact on our customers.

Get in touch with your sales representative for questions about how this could affect you.

IPA On Hold While Houston Cleans Up

April 30, 2019

Oil Tanker Waits to UnloadA massive clean-up of the Houston Ship Channel has been underway since the fire event last month at the ITC – Deer Park terminal.

The Intercontinental Terminals Company is a major storage facility for petrochemicals, located on the Houston Ship Channel. Since the fire, waterways have resumed normal operations. However, according to a ‘Situation Report’ issued by the Coast Guard on April 19, ship and barge docks at ITC- Deer Park will remain closed until further notice.

What does all this mean for Isopropyl Alcohol?

Since no cargo can be offloaded until clean up is complete, both Isopropyl Alcohol (IPA) and the raw materials used to make IPA are in vessels waiting to unload. One IPA producer, Monument Chemical, has declared force majeure on IPA, stating that ‘delays will be inevitable’.

For the time being, the backlog in the Houston port has resulted in vessels being tied up, further reducing or delaying additional imports. Major U.S. IPA producers have announced price increases. The disruption could take a few months to resolve.

CORECHEM looks forward to making sure your company has the IPA supply you need! Contact your sales representative with questions about how this may affect you.

More information about IPA.

Acetone Glut Likely to Last

April 9, 2019

As China celebrates the Spring Festival mid-February, it is not uncommon for their inventory of petrochemicals, including Acetone, to reach an annual high. However, the inventories this year are staggering.

Acetone inventory in China is presently at a 100% increase over last year. Storage facilities have reached bursting point as they turn to smaller, infrequently used tanks to hold the overflow. Ships are delayed in unloading as they arrive in ports with limited to no storage capacity.

Only about 17% of the Acetone consumed in the U.S. is imported, and primarily it comes from Belgium, Korea, South Africa, and Spain. Regardless, the excess inventory in China does effect the global market.

U.S. Phenol/Acetone producers are currently seeking to meet the demand for Phenol, while limiting the oversupply of Acetone. Acetone is a by-product of Phenol. At present, the supply of Phenol is tight.

Demand for Acetone in the U.S. is weak, as domestic Methyl Methacrylate (MMA) producers have initiated shutdowns for various reasons. MMA production is one of the two highest consumers of Acetone.

Also affecting the U.S. Acetone market: In an anti-dumping suit filed by three U.S. producers, the U.S. International Trade Commission voted last week that the U.S. Acetone market is materially injured by reason of product imported from five countries allegedly being sold at less than fair value.

CORECHEM looks forward to supplying your Acetone needs!

Two Fires Fuel Uncertainty for Methyl Ethyl Ketone (MEK)

March 26, 2019

The residents of Houston, TX found themselves under a hazardous cloud last week as a major storage facility for Shell Chemicals, ITC Deer Park terminal, blazed.

Although only a few of the 242 tanks at ITC burned, and reports did not indicate that any of the tanks contained MEK, Shell Chemicals subsequently declared Force Majeure on MEK, citing the fact that all loading and shipping operations at the terminal had ceased.

Ironically, a Taiwanese producer, Tasco, has also recently declared Force Majeure on MEK following a fire that broke out in their control room and pipeline on February 28. The Tasco plant is expected to be down for six months, pending government approval of the rebuild.

The MEK market is expected to feel the effect of the fires. At present, there are less than ten manufacturers globally of Methyl Ethyl Ketone, with the majority being produced in China and Asia. No Methyl Ethyl Ketone is currently being produced in the United States.

Other factors are affecting the U.S. MEK market. Uncertainty surrounding tariffs on imported product is causing hesitancy with U.S. importers. Also, MEKP, a major consumer of MEK, is now being produced by Nouryon at a new facility in Pasadena, TX.

To discuss the possible effect of the fires on your MEK supply and/or price, contact your sales representative. CORECHEM is committed to minimizing the effect on our customers to the best of our ability.

Caustic Soda Update

December 18, 2018

Supply: Over the past few years, several factors have led to a global tightening of supply for Caustic Soda. In China, lackluster margins for co-product chlorine and new environmental regulations resulted in steady decline of availability, particularly for US imports. In Europe, the chlor-alkali sector committed in 2001 to phase out mercury-cell technology by 2020. This became legally binding when Mercury-cell production was declared outside of Best Available Techniques (BAT) in 2013, resulting in a mandate to close these facilities or convert to Membrane technology by December 2017.

For the latter part of 2018, supply has been stable to strong, with only a few scheduled plant turnarounds and short-term disruptions, such as terminal flooding in Wilmington, NC during Hurricane Florence in September. Operating rates, however, have dropped from the 90’s to the mid-80’s as seasonal demand for Chlorine decreases.

Although no new ground-up plants are currently planned for construction, there has been recent uptick in Asian production, as well as a plant expansion in the USA, see Shintech Announces New Integrated PVC Plant Investment of $1.49 Billion to Bolster PVC Business.  Availability has also increased in the Asian and Middle Eastern markets.

Demand: On the demand side, there have been several changes recently. With the aforementioned issues in China and Europe, the USA has become a more viable and competitive global source for large consumers such as Alumina producers in South America and Australia. This has led to a steady increase in U.S. exports, to the point that the U.S. has become reliant on the export market. According to a recent ICIS report, the U.S. exports approximately 28% of current output. Latin America accounts for over half of U.S. Caustic Soda exports.

This new export market was drastically interrupted in October, when Hydro’s alumina refinery AluNorte in Brazil announced a full curtailment of operations to meet the demands of environmental authorities. This lead to an almost immediate backup in the U.S., as Alunorte accounted for a large percentage of exports. Alunorte was able to restart operations at 50% capacity, but in the meantime many Caustic Soda shipments were forced to be diverted elsewhere. AluNorte is expected to be back at 100% capacity sometime in early 2019, which is expected to balance out the current reserves.

Shift from Diaphragm Grade to Membrane Grade: An interesting twist to the market has been the steady shift in demand away from Diaphragm Grade and towards Membrane Grade product. This preference is due to the fact that Membrane contains less of the starting material, sodium chloride. The lower sodium chloride level reduces the rate of corrosion to costly equipment, particularly in paper mills, which accounts for one of the largest end-use markets. This shift has resulted in an increased availability of Diaphragm Grade, and a persistent tightness in availability of Caustic Soda Membrane Grade.

Pricing: While pricing steadily increased up until the middle of 2018, the market appears to have leveled off and starting softening in the fourth quarter of 2018. In addition, there is a growing disparity in the pricing of Membrane Grade vs. Diaphragm Grade, due to the shift in demand towards Membrane.

In spite of the recent softening, all of the major U.S. producers recently announced a $40/DST increase for all grades, citing lower operating rates and the anticipation of increased demand as AluNorte and other major consumers come back online. This increase is intended to go into effect in January 2019.


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Sodium Hydroxide Market Update

March 12, 2018

Supply: Over the past few years, several factors have led to a global tightening of supply for Caustic Soda. In China, lackluster margins for co-product chlorine and new environmental regulations have resulted in steady decline of available Caustic Soda, particularly for the export market. In Europe, the chlor-alkali sector committed in 2001 to phase out mercury-cell technology by 2020. This became legally binding when Mercury-cell production was declared outside of Best Available Techniques (BAT) in 2013, resulting in a mandate to close these facilities or convert to Membrane technology by December 2017.

Shorter-term but nonetheless significant disruptions have come as well. In August 2017, the landfall of Hurricane Harvey in the U.S. Gulf Coast resulted in disruption of over 30% of U.S. chlor-alkali production. Further to this, a producer in Brazil experienced a fire on January 15, 2018, resulting in an immediate gap of 30,000 dmt of caustic soda, subsequently sourced from US producers.

There does not appear to be a near-term solution to the supply issues. With a relatively balanced demand for chlorine, there are currently no new chlor-alkali plants under construction in the USA.


Demand: With the issues in China and Europe, the USA has become a more viable and competitive global source for Caustic Soda for large consumers such as Alumina producers in Australia. This has led to a rapid increase in U.S. exports, as the spot export price for Caustic Soda has tripled in the last 24 months. In addition, east coast U.S. imports from Europe have significantly decreased, diverting U.S. Gulf Coast shipments to the U.S. east coast to fill the gaps. Along with this is the steadily growing economy and demand for Caustic Soda in other markets such as chemical manufacturing, pulp & paper, bleach, soaps & detergents, textiles, and water treatment.

Pricing: Caustic Soda producers have steadily announced price increases to account for the increasing export demand and constrained supply. February 2018 announcements for Liquid Caustic Soda ranged from $60.00 to $85.00 per DST (Dry Short Ton). Dry caustic soda beads have followed suit, with a February announcement of $0.05 per pound.

Hurricane Harvey’s Effect on Chemical Supply

August 30, 2017

Our thoughts and prayers here at CORECHEM, Inc. are with those who have recently been affected by the Tropical Storm Harvey, which made landfall as a category four Hurricane.  Families and businesses all over the states of Texas and Louisiana have been hit hard by the fury of the storm. As a company, we are sympathetic with the individuals and show our support to anyone affected by the storm.  CORECHEM, Inc. is an active supporter of the committed charitable organization known as the Rapid Relief Team (commonly known as the RRT). ( This team has spent many hours with the community at large ensuring that their needs are met after such an awful tragedy.

(For more information about RRT’s efforts concerning Tropical storm Harvey, please visit:


According to, 13% of the country’s refining capacity is shut down because of the effects of storm Harvey. Oil refineries all along the coast are cutting down production by half, as employees and raw materials cannot pass the flooded roadways; not to mention excessive flooding and damage to equipment, facilities and processes. Supplies of inorganic chemicals (such as sodium hydroxide and sodium chloride salt) are also falling short, and fuel prices are increasing rapidly, leading to economic fears.

CORECHEM, Inc. is currently monitoring the supply situation for all our products from the coast, to ensure that our customers’ needs are met during this time of trial and limited resource.  Contact us via email ( or call (800) 258-5829 to discuss specifics on how Hurricane Harvey could impact your chemical supply chain.