News & Events

General Hurricane Update

In General

  • Gulf Coast area refinery and petrochemical facilities continue their restart efforts
  • Feedstock utilities and logistics issues have mostly been resolved but impact to be felt through October in form of tight supplies
  • Power issues and flood cleanup will keep several Port Arthur Beaumont/Orange, Texas, facilities down for extended period

PET

Hurricane Supply Chain Impact

  • No production facility directly impacted
  • Numerous key feedstock suppliers of MEG and paraxylene declared force majeure
  • Impact of back-to-back hurricanes particularly troublesome for MEG suppliers
  • Feedstock supplies to be tight through October
  • Silgan and resin suppliers carefully monitoring facility restart process

Market Review

  • Overall demand is weak
  • Additionally, market has entered seasonal slow down period
  • Feedstock prices declining despite hurricane related short-term supply impact
  • Polymer prices to move lower over balance of 2008. Amount and timing depends on supply chain capacity restoration

PE

Hurricane Supply Chain Impact

  • Several plants received substantial damage and will not be returned to service until November or possibly later in the year
  • Many producers are short feedstock and unable to run their polymer plants at full capacity
  • The majority of suppliers are still on force majeure
  • Resin shortages appear to be very plant and grade specific for PE producers
  • Supply situation has not improved as quickly as anticipated as several key ethylene plants have not come back on schedule

Market Review

  • August was a large inventory build month for producers and has helped absorb the initial hurricane disruption
  • Feedstock costs have fallen substantially as oil and natural gas have moved down from their July peaks
  • Overall North American demand (including export) is reported weak for August and September and through the fourth quarter
  • PE prices to move lower in the fourth quarter but balanced by supply and demand fundamentals caused by the hurricanes
Polypropylene


Hurricane Supply Chain Impact

  • No polypropylene production facility had substantial damage
  • 72% of Gulf Coast production was shut down before the hurricane made landfall
  • Four producers announced force majeure. While plants are in restart mode, some allocations remain
  • Most plants are either back up and running, or will be this week

Market Review

  • Overall domestic and export demand is weak
  • Bi-product propylene supply is expected to be sufficient even with the shutdown of ethylene production
  • Propylene prices are declining despite hurricane capacity impact
  • Polypropylene prices to decline next couple of months then flatten out

Silgan Plastics Corporation
Westland Place Building
14515 N. Outer Forty, Suite 210
Chesterfield, MO 63017
Phone: 1-800-2-SILGAN
Copyright© 2008
Silgan Plastics Corporation.
All Rights Reserved.
Legal Notice

cart View Cart
Home