Polar Storms Paralyze Chemicals

February 19, 2021

MANY chemicals have been severely affected by the winter storms Uri and Viola that rocked the Gulf Coast region this week, including Propylene Oxide, Propylene Glycol, Hydrocarbons, Acetone, Isopropyl Alcohol, P-series Glycol Ethers, E-series Glycol Ethers, Chlorine, Caustic Soda, and Hydrochloric Acid, to name a few. The weather crisis has caused dozens of plant outages, a flurry of Force Majeure notifications, and in some cases a shortness of supply. Products are delayed as large percentages of US capacity are offline- Ethylene 65%, Propylene Oxide 49%, Ethylene Glycol 89%, and etc.

This historic winter storm in the Gulf Coast has further exacerbated an already tight situation on Propylene Oxide and derivatives- see: Rising Propylene Shifts Market for IPA, Other Chemicals. The further impact of the storms is likely to be massive on a market already at 10-year-highs, and could take many weeks to resolve.

For questions on how this will affect your chemical supply and/or price, reach out to a sales representative.

Hydrochloric Acid Makes a Comeback

December 1, 2020

For the past eight months, the US Hydrochloric Acid market has been plagued by soft demand, plentiful supply, and 4-year-low prices. Now, with the return of cooler temperatures, the market has shifted.

Hydrochloric Acid is a corrosive mineral acid, and one of the cheapest and most widely used commodity chemicals due to its high versatility. It may be produced intentionally (i.e. as a part of the chlor-alkali process, “on-purpose acid”) or as a by-product of another product. Both on-purpose acid and by-product acid have had supply outages in recent weeks. This large reduction in supply has caught up with and finally overtaken the softened demand condition existing in the market, leading to price increases and even supply issues for some marketers.

What kind of supply outages? A little bit of everything actually! Multiple producers had unplanned outages due to hurricanes. One major producer had to declare force majeure. Several by-product producers had planned shutdowns for plant maintenance. And Chlorine, a pre-cursor to Hydrochloric in the chlor-alkali process, has become tight. Since there are many outlets for chlorine, it makes sense for a chlor-alkali producer to shift production away from less profitable Hydrochloric Acid and divert the same chlorine molecule to more profitable applications such as plastics. PPE and other downstream derivatives continue to command higher prices due to overall stronger demand. Essentially, the low market price of Hydrochloric Acid led to producers not being able to cover costs of producing it, and therefore has become unsustainable.

While these events may impact your Hydrochloric Acid price, CORECHEM does not foresee supply issues. With further questions about how the market shift may affect you, reach out to a sales representative today.