Shintech Inc. has idled a massive PVC resin production site in Freeport, Texas, because of lack of available feedstock.
S&P Global Platts first reported the closing Sept. 8. It was confirmed by market sources contacted by Plastics News. Officials with Shintech in Houston could not be reached for comment.
The Shintech site in Freeport has annual PVC production capacity of 3.2 billion pounds, making it the largest such plant in the U.S., according to S&P. The closing will further tighten U.S. PVC supplies in the wake of Hurricane Ida.
Shintech's Freeport unit was left without a supply of vinyl chloride monomer feedstock after a VCM unit operated by Olin Corp. in Freeport shut down the week of Aug. 30 because of an equipment failure, sources said.
Hurricane Ida reached land in Louisiana on Aug. 29. About 40 percent of U.S. PVC capacity was in the path of the storm and was idled in advance of the storm. That amount — most of which remains down — included PVC units operated by Shintech in Plaquemine and Addis, La. With the Shintech closing in Freeport, almost 60 percent of U.S. capacity now is offline.
Sources previously said that the Louisiana closings made it likely that a 2 cent PVC price hike that had been nominated by producers for September would be successful. The impacts of the COVID-19 pandemic, two hurricanes in the second half of 2020 and an ice storm that hit Texas in February already have moved regional PVC prices up 24.5 cents so far in 2021 and a net of 40 cents since January 2020.
In January, Shintech announced plans to spend $1.3 billion to expand PVC production and related activities in Louisiana. Most of that amount will be spent to increase production of PVC resin and related materials in Plaquemine. Shintech also said it would expand PVC packaging and warehouse operations in Addis.
The expansion will add about 840 million pounds of annual PVC production capacity, as well as 1.3 billion pounds of vinyl chloride monomer and 860 million pounds of caustic soda. The project is expected to be completed in 2023.
The January expansion announcement was in addition to an expansion announced in mid-2018 that was to be completed this year. The previous expansion was a $1.5 billion project that added 640 million pounds of annual PVC capacity and 1.9 billion pounds of VCM.
Shintech ranks as one of North America's largest PVC makers. The firm is a unit of Shin-Etsu Chemical Co. Ltd. of Tokyo, which ranks as the world's largest PVC maker.