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News
September 07, 2017 02:00 AM

Polycarbonate supplies might be tight after Harvey

Frank Esposito
Plastics News Staff
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    Covestro Baytown/Twitter
    Employees at Covestro's Baytown, Texas, plant were given time during work hours to volunteer to help clean properties affected by Hurricane Harvey.

    The impact of Hurricane Harvey might hit the North American polycarbonate market harder than other resins.

    That's because regional PC supplies already were tight before Covestro's PC unit in Baytown, Texas, was affected by the storm, which hit the Texas coast on Aug. 25. A company spokesperson said Sept. 6 that Covestro is initiating restart procedures for all of its product lines at Baytown and Channelview, Texas.

    Covestro, which is based in Leverkusen, Germany, with North American headquarters in Pittsburgh, also has declared force majeure sales limits on several products, but not on PC, as of Sept. 7.

    "Our polycarbonates business has inventory located outside the hurricane impact zone, as well as a global network of manufacturing sites where products can be secured if needed," the spokesperson said in a Sept. 6 email to Plastics News.

    Previous North American PC supply tightness had been caused by challenges faced by Saudi Basic Industries Corp. in implementing a new computer system. Sabic still is working to correct that situation, which began last October.

    On top of that, Sabic in June had production problems at its PC plant in Burkville, Ala. A company spokesperson in August told PN that the plant "completed repairs and is resuming normal operations." Sabic, which is based in Riyadh, Saudi Arabia, with North American headquarters in Houston, also makes PC resin in North America at a plant in Mount Vernon, Ind.

    "The allocation on certain Lexan [PC] resin grades is still in effect," the spokesperson said in August. "We continue to work with our customers to assess their needs and our ability to continue to supply."

    Paul Blanchard, a market analyst with IHS Markit in Houston, said that while PC inventories may cover supply gaps now, the PC supply situation for Sabic and Covestro "will depend on the prompt resumption of cumene/phenol production at their suppliers, who in turn depend on benzene and propylene production from refineries."

    "There's still uncertainty around the condition of the upstream plants that were affected," Blanchard said in an email. "PC is likely to be tighter than it was two weeks ago."

    Market analyst Mark Kallman with Resin Technology Inc. in Fort Worth, Texas, added that, for PC resin makers, "getting the phenol they need to make BPA is key."

    "Down the road, it really depends on recovery of the web of feedstocks and intermediates along with transportation, energy, and personnel," he said in an email. "In combination with the [Burkville] plant outage earlier this quarter and on-going demand, we are looking at a tight PC market."

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