The COVID-19 epidemic is gradually impacting many areas of the U.S. economy. As more and more companies shut down and supply chains were disrupted, the U.S. manufacturing industry began to feel the pain caused by the epidemic. Already, more and more chemical project construction and factory production have been suspended. Shell Oil announced the suspension of the construction of a large chemical plant in Pennsylvania, the United States; Nova Chemicals decided to suspend construction activities on the Canadian project; LyondellBasell suspended the construction of a large propylene oxide/tert-butanol unit in Texas, the United States.
01 Shell suspends the construction of a large chemical plant in Pennsylvania, USA
According to foreign media reports, Shell Oil Company stated on March 18 that in order to To prevent the spread of the novel coronavirus, the company has suspended construction of a massive $6 billion petrochemical plant.
Shell did not disclose whether any employees or contractors at the site had been diagnosed with COVID-19. Shell said: “We have decided to suspend construction activities at Shell’s Beaver County, Pennsylvania, site effective March 18.”
To prevent the spread of the disease, the company Plans to take measures based on guidance from the U.S. Centers for Disease Control and Prevention (CDC).
Shell said: “We will consider phased upgrades to continue safe and responsible construction activities.”
The petrochemical complex, located in western Pennsylvania, plans to produce ethylene and polyethylene from nearby low-cost Marcellus and Utica shale ethane, including an ethane cracker, average ethylene The production capacity is approximately 1.5 million tons/year; there are three polyethylene units with a total production capacity of 1.6 million tons.
02 Nova Chemicals decided to suspend construction activities
Canada’s Nova Chemicals recently stated that it is adjusting the construction work of its new AST 2 polyethylene facility and Corunna Cracker expansion project in Ontario, temporarily focusing on the most critical work. This will reduce the total number of construction workers by approximately 90%. A phased expansion will be considered in due course to allow construction activities to be completed safely.
Nova Chemicals also said it has suspended commissioning and construction activities at the cracker refurbishment project in Alberta. Construction will resume once it is confident that the risk of exposure has been reduced.
Nova Chemical said the health and safety of its employees, contractors and communities remains the company’s top priority amid the COVID-19 pandemic. The decision to suspend construction activities allows the company to maintain the safety and well-being of its workers while continuing to advance business-critical construction projects.
03 LyondellBasell on hold
The construction of large-scale propylene oxide/tert-butanol plant in the United States
LyondellBasell announced on March 30 that the company will suspend The construction of its propylene oxide/tert-butanol unit in Channelview, Texas, USA. As the coronavirus pandemic has spread significantly across the United States over the past few weeks, companies are limiting non-essential activities and minimizing human contact.
The olefins and polyolefins giant said the project, which broke ground in August 2018, is about 30% complete, with installation of key equipment and towers underway. It is chosen to limit construction activity at this time because the base is not yet producing the needed products.
LyondellBasell said, “We remain committed to completing this strategic investment in our low-cost, next-generation PO/TBA technology. In the coming weeks, , will work with contractors and suppliers to develop a revised project schedule.”
This investment is US$2.4 billion The facility, the largest of its kind in the world and the largest investment to date in the company’s history, is expected to start production in mid-2021. Once completed, the unit will produce 2.2 billion pounds/year (1 million tons/year) of tert-butyl alcohol and 1 billion pounds/year (400,000 tons/year) of propylene oxide.
LyondellBasell said its existing installations at its Channelview and Bayport integrated sites in Pasadena, Texas, will continue. Both locations are designated critical infrastructure.
04 The U.S. chemical industry activity barometer index dropped sharply in March
The American Chemicals Council (ACC) announced on March 31 that the Chemical Industry Activity Barometer (CAB) index dropped sharply in March.
The three-month moving average (3MMA) index of the United States in March was 120.12, down 2.6% month-on-month and 1.3% year-on-year.
The Chemical Industry Activity Barometer (CAB) index in March was 113.15. After falling by 1.1% and 1.2% in February and January respectively, the decline in March was 8.0%. The decline is the largest since World War II.
Kevin Swift, chief economist of ACC, said: “The CAB index marks the decline of U.S. business.” ACC believes that when the barometer reaches three consecutive monthly decline and falls by 3.0% or more from the peak, ��Spillovers will be greater than current baseline levels. In the downside scenario, the global economy will contract by 1.3% in 2020.
09 Hope for China’s recovery
China was the first country in the world to go into lockdown, and its recovery is expected to be repeated in other countries as nationwide restrictions are gradually lifted. From March 25, Hubei Province has lifted all domestic travel restrictions except for Wuhan.
“Wuhan, I’m finally waiting for you”
From 0:00 on April 8, Wuhan City will lift the control of the passage from Han to Hubei. measure. After more than two long months from cold winter to warm spring, Wuhan finally “unblocked” the city.
According to ICIS’s latest survey on China’s petrochemical industry, the situation in China’s petrochemical industry is mixed. Between March 20 and 26, 24 factories reopened. But 21 have closed. ICIS reported that xylene and toluene stocks at eastern China ports fell, but styrene monomer stocks rose.
10 Key demand has dropped significantly, chemical companies face difficult choices
John Richardson, senior consultant at ICIS Asia, and Paul Hodges, chairman of the world-renowned consulting firm International eChem, said that the coronavirus epidemic means that the chemical industry may face a financial crisis worse than that of 2008-2009. A more serious demand shock occurred when the operating rate of the chemical industry fell to 46%.
The two analysts said that global demand for key end-use industries for chemical products such as automobiles, construction and electronics has dropped sharply, leaving chemical companies facing difficult choices when maintaining business. Hodges said: “This is probably the biggest drop in demand since the end of World War II, when GDP fell by 25%. From a great recession like this, it can take 10 years to recover. The global financial crisis of 2008-2009 is today’s A dress rehearsal – In December 2008, the global chemical industry’s capacity utilization rate fell to 46%. Financially, chemical companies must focus on cash and debt to weather this storm and ensure that customers and suppliers Be solvent while controlling costs.” Richardson’s latest estimates published on his blog show that in the most optimistic scenario, global ethylene demand could fall by 30 million tons from 2020 to 2022 compared with pre-crisis forecasts. , in the worst case scenario, ethylene demand will be reduced by 71 million tons. </p
