Formosa Plastics Corp. USA will have a major high density polyethylene resin unit out of commission for at least two months, according to a media report.
A recent report from the S&P Global Platts news service said that a Formosa unit with almost 1.5 billion pounds of annual production capacity will shut down for maintenance from July to early September. Formosa's HDPE production is located in Point Comfort, Texas.
The report added that the Formosa unit primarily makes HDPE for film applications. It also said that Formosa would have a 440-million-pounds-per-year HDPE unit making grades for blow molding closed for maintenance in October and that a low linear density PE unit that had been shuttered by the company will restart in July. Formosa's LLDPE production also is based in Point Comfort.
Formosa spokesman Fred Neske said in an email to Plastics News that the Livingston, N.J.-based firm "doesn't comment on operational issues or plant status unless we anticipate a substantive impact on the marketplace."
Regional demand for PE in the U.S. and Canada has held up fairly well in the wake of the COVID-19 pandemic. Most new PE capacity added in North America in recent years, to capitalize on low-priced shale gas, has been aimed at export markets.
During the COVID-19 crisis, rising demand for PE in packaging and medical applications has been offset to a degree by demand drops in other sectors, such as construction. Dow Inc. in May idled three PE units in Texas for at least a month in response to the slowdown. Market sources said that other PE makers in the region have adjusted production to meet demand without taking entire units down.
Regional PE prices were flat in May after dropping an average of 4 cents per pound in April. Sources said there is support for a 4-cent increase that producers are seeking for June.