US-based petrochemical maker Dow Inc. is shutting two polyethylene (PE) plants and two elastomers units in the US to avoid inventory build amid weak demand due to the coronavirus pandemic, its CEO said on Thursday. Market sources told SSESSMENTS.COM that the shutdown affects a solution PE train in Freeport, Texas, a gas phase PE unit in Seadrift, Texas, and two elastomers units in Louisiana to avoid oversupply.
The idling is expected to last for at least a month. However, the exact timeframe for the shutdown at each unit is unavailable. Dow also idles a PE plant in Argentina, which when combined with the aforementioned units, have a total capacity of around 2 billion pounds/year (907,000 tons/year), accounting for about 10% of Dow’s Packaging & Specialty Plastics capacity. According to Jim Fitterling, the shutdown is aimed to balance demand and avoid inventory pressure amid shutdowns in the downstream sector.
Fitterling noted that the weak demand would weigh on PE pricing in the second quarter of 2020. However, he expects demand to improve after many states in the US and European countries reopening some parts of their economies in May.
