Texas industrial facilities have been without power for days as the state administrator continues to try to restore all parts of the grid after the frigid storms that ravaged the US Gulf Coast all week.
Large industrial installations for raw materials have been shut down
Large industrial plants for the production of raw materials for various adhesives have been voluntarily controlled or suddenly forced to stop their activities. Nearly all factories eventually ran out of power. The Electric Reliability Council of Texas (ERCOT) said in an update late on Thursday, as priority is being given to residential homes that have been without power and heat since Monday due to freezing temperatures.
Areas in the state that have lost power due to ice storm damage to the distribution systems, and areas that need to be brought back online manually are also likely to lag behind in regaining power, the operator added. Despite improved power generation capacity and stability, hundreds of thousands of homes in Texas and the wider Gulf region are still without power. Power outages have also paralyzed most of the US production of certain chemicals.
Customers without power by state
Disaster for ethylene production
More than 60 squatters, chemical and mining companies have been registered online by ICIS since Friday morning.
This includes facilities that account for nearly three-quarters of US ethylene capacity and a comparable portion of propylene production is either offline or running at reduced speed.
Price increases are inevitable
Given that almost all of the polypropylene (PP) production capacity in the US has been affected and there are significant production interruptions for polyethylene (PE), the situation is likely to drive up polyolefins prices, given the tightness on the supply side and rising monomer costs, that had troubled the market even before the freeze.
There is simply nothing left to deliver
The US production of some other chemicals, including epichlorohydrin (ECH) and toluene diisocyanate (TDI) have ceased to exist in all respects in the US due to the disruption. The freeze also caused significant logistics disruptions, freezing roads and closing bridges, and wreaked havoc on water and rail transport. Public terminals in the Port of Houston, a major hub for chemical products in the region and the country, remained closed, an update showed late on Thursday.
Several ethylene export terminal operators in the US had declared force majeure for Friday morning deliveries due to water and electricity supply problems and leaking natural gas pipelines, and railroad companies have warned customers about delays in deliveries. While electricity generation is more stable, according to ERCOT, at 6:30 p.m. local time (Friday 00:30 GMT) on Thursday, 36,000 megawatts were out of necessity, meaning supply is likely to be impacted after the expected atmospheric thaw expected this weekend.
There is even a shortage of water
Access to water is also a problem for many residents at the moment. The Texas Department of State HealthServices still issued a warning on Thursday evening that the water should be boiled.
The organization reported unprecedented water losses and thousands of burst pipelines to be repaired, meaning that access to water supplies could also be a problem for the industry after the ice melts.
Worldwide delivery problems
The effect of the disruptions has already started to drive up prices for some chemicals worldwide in anticipation of potential problems in securing supplies.
European spot styrene prices rose $ 350 / tonne from the day before, and naphtha prices have also started to rise. The olein markets were already extremely tight before the storm, with Borealis' CFO Mark Tonkens recently expressing his gratitude for the fact that the protracted outage at one of its European squatters did not occur now.