News Code : 43442

Olin was conducting a turnaround at its 748,000 mt/year ethylene dichloride plant in Freeport, Texas, a source familiar with company operations said.

Petrotahlil :The turnaround was expected to reduce EDC oversupply when prices have been under pressure amid seasonally high chlor-alkali rates, market sources said. Olin, the world's largest chlor-alkali producer, did not respond to an inquiry seeking comment. The work was expected to last into the early fourth quarter.

The latest industry statistics show US chlor-alkali rates reached 92% in August, the highest so far in 2019. While chlorine demand seasonally rises for water treatment during the summer months, higher chlor-alkali rates also boost EDC stocks as chlorine mixed with ethylene makes EDC, a precursor to construction staple polyvinyl chloride, for which demand also rises during the construction-heavy warmer months.

As supply has risen, spot EDC prices have fallen sharply.

Platts data show prices reached their 2019 high of $370/mt FOB USG in March and have since fallen more than 44% to $205/mt FOB USG. Brazilian petrochemical producer Braskem became wholly dependent on EDC imports in May when the company shut its salt mining operation as well as a chlor-alkali plant and its sole EDC plant in Brazil after a government report linked the salt extraction to geological damages in the state of Alagoas. However, Braskem has sought short-term quarterly contracts for EDC imports to maintain PVC production rather than rely on more volatile spot markets, leaving US spot EDC prices to decline amid ample supply.

Market sources said Asian EDC buyers have pushed for prices that equate to $160-$170/mt FOB USG, and US producers have been resisting prices below $200/mt FOB USG. In addition to Olin's turnaround, at least one other producer was heard to reduce output of export EDC volumes rather than sell at lower prices. A market source noted that producers can sell volumes to buyers in South America, Europe and the Indian subcontinent.

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