Recently, Dow issued an emergency notice that the impact of an accident by a supplier of upstream raw materials interrupted its ability to supply key raw materials to Dow’s business, therefore, Dow announced that propylene glycol suffered force majeure and stop supply, and the restoration time will be notified subsequently.

Dow announces force majeure on propylene glycol

 

As a result of Dow’s supply problems, triggered the chemical industry chain chemical giant companies cut off supply crisis.

 

On May 5, 2022 local time, BASF announced in a letter to customers that it will not be able to deliver expected quantities of propylene oxide to BASF due to an event beyond the control of BASF Dow HPPO, an important supplier of propylene oxide. So much so that BASF Polyurethanes GmbH must declare difficulties in supplying polyether polyols as well as polyurethane systems in the European market.

 

As of now, BASF can neither secure existing orders for May nor confirm any orders for May or June.

 

List of affected products.

List of Affected Products
Several international chemical giants stop supply

 

In fact, this year, under the influence of the global energy crisis, a number of international chemical companies have announced the suspension of supply.

 

On April 27, U.S. energy giant Exxon Mobil said its Russian subsidiary Exxon Neftegas had announced that operations at its Sakhalin-1 oil and gas project had been affected by force majeure, as sanctions against Russia made it increasingly difficult to deliver crude oil to customers.

 

“The Sakhalin-1 project produces Sokol crude oil off the coast of the Kuril Islands in the Russian Far East and exports about 273,000 barrels per day, mainly to South Korea, as well as other destinations such as Japan, Australia, Thailand and the United States.

 

Following the outbreak of the Russia-Ukraine conflict, ExxonMobil announced on March 1 that it would exit approximately $4 billion in assets and cease all operations in Russia, including Sakhalin-1.

 

At the end of April, the five major plants of INNEX announced that their deliveries were subject to force majeure. In a letter to customers, Inglis said that all of its polyolefin products related to rail restrictions were affected by the force majeure and that it expected to be required to limit rail shipments to below its best average daily rate.

Polyolefin products subject to this force majeure include

 

A 318,000-ton-per-year high-density polyethylene (HDPE) unit at the Cedar Bayou plant in Texas.
A 439,000 ton/year polypropylene (PP) unit at the Chocolate Bayou, Texas, plant.
794,000 tpy HDPE plant at Deer Park, Texas.
147,000 tpy polypropylene (PP) plant in Deer Park, Texas.
A 230,000 tpy polystyrene (PS) plant in Carson, California.
In addition, Ineos Olefins & Polymers has not yet resumed operations at its PP plant in Carson, California, due to a power outage and manufacturing earlier this month.

 

Notably, chemical giant Leander Basell has also made several announcements since April about shortages in the supply of raw acetate, tert-butyl acetate, ethylene glycol ether acetate (EBA, DBA) and other products due to mechanical failures and other force majeure factors.

 

On April 15, a mechanical failure occurred at Leander Basell’s raw acetate carbon monoxide supply system in La Porte, Texas.

 

On April 22, force majeure was declared on tert-butyl acetate and ethylene glycol ethyl ether acetate (EBA, DBA).

 

Leander Basil Force Majeure

 

On April 25, Leander Basell issued a quota sales notice: The company is implementing sales allocation for tert-butyl acetate, propylene glycol methyl ether acetate and other products.

 

The notice shows that this allocation is based on the average monthly purchases by customers over the past 6 months (October 2021 – March 2022) and that the program will be effective from May 1, 2022. The news foreshadows that the above-mentioned raw materials will be supplied in limited quantities according to customers’ previous purchases.

 

A number of domestic chemical companies stop work

 

Domestically, many chemical leaders have also entered the parking and maintenance period, which is expected to be 5 million tons of capacity “evaporated”, and the supply of raw materials has been affected.

 

In May this year, the domestic PP market plans to overhaul capacity in 2.12 million tons, the type of overhaul mostly oil-based enterprises; another April left to May overhaul enterprises are Yangzi Petrochemical (80,000 tons / year) is expected to drive on May 27; Hainan refinery (200,000 tons / year) is expected to drive on May 12.

 

PTA: Sanfangxiang 1.2 million tons of PTA plant parking maintenance; Hengli Petrochemical line 2.2 million tons of PTA plant parking maintenance.

 

Methanol: Shandong Yang Coal Hengtong annual output of 300,000 tons of methanol to olefin plant and supporting 250,000 tons / year methanol plant is scheduled to stop for maintenance on May 5, is expected to last 30-40 days.

 

Ethylene glycol: A 120kt/a syngas to ethylene glycol plant in Inner Mongolia is scheduled to stop for maintenance near mid-May, expected to last about 10-15 days.

 

TDI: Gansu Yinguang’s 120,000-ton plant will be stopped for maintenance, and the resumption time is not yet determined; Yantai Juli’s 3+50,000-ton plant will be stopped for maintenance, and the resumption time is not yet determined.

 

BDO: Xinjiang Xinye 60,000 tons per year BDO plant overhauled on April 19, expected to restart on June 1.

 

PE: Hai Guo Long Oil PE plant stop for maintenance

 

Liquid ammonia: Hubei fertilizer liquid ammonia plant stop for maintenance; Jiangsu Yizhou technology liquid ammonia plant stop for maintenance.

 

Hydrogen peroxide: Jiangxi Lantai hydrogen peroxide stopped for overhaul today

 

Hydrofluoric acid: Fujian Yongfu chemical hydrofluoric acid plant stop for maintenance, the manufacturer of anhydrous hydrofluoric acid is temporarily not quoted to the public.

 

In addition, the epidemic caused a number of enterprises to stop work. For example, Jiangsu Jiangyin City, the city’s reference “control area” for management, Huahong Village, light textile market and other important places in the industry was directly listed as a closed control area, light textile market, hundreds of stores all closed. Zhejiang, Shandong, Guangdong and the Pearl River Delta region, as well as Shanghai and the surrounding Yangtze River Delta region, a number of chemical provinces and electronic towns are affected, low load starters abound, automotive, electronics and other manufacturing industries to start transport also had to announce the suspension.

 

Under the influence of force majeure factors such as obstruction of logistics, closure and control of many places, restrictions on the start of work, chemical giants cut off supply, chemical raw material prices continue to soar. For some time in the future, raw material prices may remain at a high level, and everyone hold on to stock up.


Post time: May-10-2022