How Does U.S. Hurricane “Francine” Influence PP Industry?
Highlights: The demand peak season, September and October, was the high-incidence season of hurricanes in previous years in the U.S. Hurricane “Francine” landed on the coast of Louisiana at about 5:00 p.m. on September 11, which affected most of the petrochemical products in the U.S. Related polyolefin units were also involved. SCI has researched relevant industry information and impact timely and provided the following analysis.
The chemical industry in the U.S. has developed rapidly and has a high degree of industrial concentration, which occupies an important position in the world. After meeting the domestic production demand, the U.S. has already carried out the export business, and its chemical market scale is also very large. Because of its early entry into the chemical market, the U.S. also has a large number of world-renowned chemical enterprises, and its products are highly recognized in the market. The demand peak season, September and October, was the high-incidence season of hurricanes in previous years in the U.S. Hurricane “Francine” made landfall on the Louisiana coast at about 5:00 p.m. on September 11, with maximum sustained winds of nearly 160km/h, affecting most of the U.S. petrochemical products. The total capacity of polyolefin in the U.S. is about 29.906 million mt, accounting for 13.45% of the global polyolefin capacity. Polyolefin, as a part of the entire industrial chain, has also been hit by the hurricane.
According to SCI’s research, hurricane “Francine” has different effects on polyolefin units in Louisiana, mainly involving 1,859kt/a PP units, and their capacity accounts for 20% of the total PP capacity in the U.S. In China, PP import volume shrank year by year, and imports from the U.S. were limited. The total PP capacity is 9,210kt/a or so, while China only imported 23.2kt of PP from the U.S. between January and July 2024, occupying 1.11% of the total imports.
In Louisiana, The PP production at ExxonMobil, Pinnacle Polymers and Equistar Chemicals LP was impacted by the hurricane. Therein, ExxonMobil exported a small number of PP goods to China. In terms of the flow of goods, most of the North America and South America supply each other. The number of PP goods exported to the U.S. is small because of shipping time and freight, although China’s producers actively lay out overseas markets and open up the export business. Besides, China’s PP import dependence degree was below 10%. Generally, the hurricane exerted a small effect on the PP import market in China.
At present, the impact of the hurricane on the polyolefin industry is relatively limited, and other extended impacts have not yet emerged. SCI will continue to track the relevant situation and influence in the future.
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