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 hasfurtherexacerbated an already tight situation on Propylene Oxideand 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.
Rising Propylene Shifts Market for IPA, Other Chemicals
February 10, 2021
The US Isopropyl Alcohol market has been a sideshow of its own against the backdrop of the COVID-19 pandemic. Commonly used for sanitization, IPA’s initial extraordinary price leap left market players staggered. Then, just as suddenly, a dramatic slide as the need was met, that brought pricing nearly back to pre-pandemic levels. Where will it end? What will it do next?
Since there are several ways to make Isopropyl Alcohol, factors that affect the US IPA market are numerous and varied… hence the wild ride! Changes in prices of feedstock materials (i.e. crude, propylene), planned and unplanned plant shutdowns, and of course, the supply and demand shifts caused by the pandemic all can have repercussions in the market.
IPA prices hit their lowest point since the start of the pandemic in the last weeks of 2020 (essentially returning to pre-pandemic levels). Since then, prices have bounced up again, on a rapidly upward trajectory. This time the increase is caused by the rising cost of feedstock propylene. Overall, propylene has nearly tripled in cost over the past ten months, and continues to rise steadily. Propylene is a derivative of crude oil, which has risen substantially in the past few weeks especially following the vaccine announcement. Additionally, it is a by-product of gasoline production, constraining supply due to lack of demand for fuel. Other market factors like planned outages for maintenance are expected to tighten propylene supply for the first half of the year, and to top things off, demand for propylene remains strong for packaging and many other derivatives.
Multiple increases have been tabled by producers, and are taking effect. Also affected by the rising cost of propylene? P-Series Glycol Ethers, Propylene Glycol, and Acetone.
What’s next? Chemical markets are very volatile right now. While IPA prices are certainly on an upward climb, we don’t expect to see the dizzying high prices we saw last spring. And although demand for IPA remains steady and strong, we don’t foresee the dramatic shortness of supply again, either.
At CORECHEM we continue to monitor the situation. For questions about how this may affect your chemical supply/price, get in touch with a sales representative. We look forward to working with you!
Plant Issues Cause Propylene Glycol Hike
October 29, 2020
Earlier this month, a leak developed in a Propylene Oxide refining column at LyondellBasell. Force Majeure has been declared by LyondellBasell on all Propylene Oxide derivatives as they have been forced to significantly cut production as a result. As Propylene Oxide is a precursor to Propylene Glycol, this plant issue has had immediate impact to Propylene Glycol.
LyondellBasell is one of just a handful of US Propylene Glycol manufacturers, and a large and key part of PG supply in the US. The situation could be several weeks before back-to-normal. In the meantime, Lyondell’s customers are on 70% allocation, and increases are taking effect.
For further questions about how this may effect your Propylene Glycol supply and/or price, reach out to your sales representative today.