Industrial facilities in Texas were without power for days as the state administration continued to attempt to restore all parts of the power grid after the freezing storms that struck the US Gulf Coast all week.
LARGE INDUSTRIAL RESOURCE PLANTS STAND STILL
Large industrial plants that produce raw materials for various adhesives were shut down voluntarily in a controlled manner or suddenly had to cease operations. In the end, practically all systems were without electricity. said the Electric Reliability Council of Texas (ERCOT) in an update late Thursday, as it primarily supplies households that have been without electricity and heat since Monday due to the freezing temperatures.
Areas in the state that are out of power due to ice storm damage to distribution systems and areas that need to be manually reconnected are also likely to experience a delay in power restoration, the operator added. Despite improved power generation capacity and stability, hundreds of thousands of households in Texas and the wider Gulf region are still without power. The outages have also paralyzed much of the production of certain chemicals in the United States.
Customers without electricity by state
ETHYLENE PRODUCTION DISASTER
More than 60 cracker, chemical and mining companies have been registered online with ICIS since Friday morning.
This includes facilities that account for nearly three-quarters of US ethylene capacity and a similar portion of propylene production that is either offline or running at reduced speeds.
PRICE INCREASES ARE INEVITABLE
Since almost the entire production capacity for polypropylene (PP) in the USA is affected and there have been significant production downtimes for polyethylene (PE), the situation is likely to drive up prices for polyolefins, as the scarce supply and rising monomer costs are already ahead of the market upset the freezing.
THERE IS JUST NOTHING MORE TO DELIVER
Production of some other chemicals, including epichlorohydrin (ECH) and tolylene diisocyanate (TDI), has been almost completely stopped in the US as a result of the disruption. The frost also caused significant disruptions in logistics through road blockades and bridge closures and paralyzed water and rail transport. Public terminals in the port of Houston, a major chemical hub in the region and country, remained closed, an update revealed late Thursday.
Several operators of ethylene export terminals in the US had declared force majeure on deliveries Friday morning due to water and electricity problems and leaking natural gas pipelines, and the railroad companies have warned their customers of delivery delays. Although power generation is more stable, according to ERCOT, at 6:30 p.m. local time on Thursday (00:30 a.m. GMT on Friday) there was still a 36,000 megawatt outage, meaning supplies will likely be impacted after the thaw expected for this weekend.
There is even a shortage of water
Access to water is also currently a problem for many residents. The Texas Department of State HealthServices continued to issue a warning Thursday evening that water should be boiled.
The organization reported unprecedented water losses and thousands of burst pipes in need of repair, meaning access to water supplies could also be an issue for industry after the ice melts.
GLOBAL SUPPLY PROBLEMS
The impact of the disruptions has already begun to drive up prices for some chemicals around the world in anticipation of potential supply issues.
European spot prices for styrene increased by $350 / ton compared to the previous day, and naphtha prices have also started to increase. The olefin markets were extremely tense even before the storm. Borealis CFO Mark Tonkens recently expressed his gratitude that the prolonged failure of one of its European crackers has now not occurred.