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Braskem Halts Production at Marcus Hook Amid Industry Shifts
09/27/2023
Braskem America, the largest Polypropylene (PP) producer in the Americas, has announced the cessation of operations on one of its PP resin production lines located in Marcus Hook, Pennsylvania. The now-idled line, one of the oldest and smallest in the US, had an annual production capacity of approximately 450 million pounds and faced feedstock limitations. However, Braskem will continue to operate a second line at the same site, which also boasts a similar annual capacity.
A Braskem representative clarified that the move is aimed at bolstering the company's long-term resilience. The spokesperson stated, "To ensure the long-term resilience amid continuing global economic uncertainty and a trough in the chemical industry business cycle, we have made the difficult decision to implement an extended idling of one of our [PP] production lines" in Marcus Hook. This shutdown will lead to a "limited reduction in our workforce," the spokesperson added.
The introduction of 2.15 billion lbs of new North American Polypropylene capacity towards the end 2022 has resulted in an oversupply of resin, contributing to a slump in the PP market and consequential margin compression. The new capacity includes ExxonMobil's 1-billion-pound PP plant in Baton Rouge, Louisiana, commissioned in November 2022, while Inter Pipeline also commissioned its Propane Dehydrogenation (PDH) unit at its Alberta, Canada complex in 2022. This paved the way for the Company to later begin full operations at its Heartland Polypropylene facility, with an annual capacity of 1.15 billion pounds, as the only integrated PDH / PP complex in North America.
This development by Braskem follows the closure of one of LyondellBasell's PP units in Brindisi, Italy, which had been operational since 2002. The industry is witnessing a push from major global players to enhance efficiency through the adoption of cutting-edge technology and the establishment of world-class scale facilities. In this evolving landscape, older and relatively smaller resin reactors are struggling to compete with the efficiency of newer, large-scale plants being developed globally. We expect additional PDH units to be built that can take advantage of lower cost Propane feedstocks to manufacture on-purpose Polymer Grade Propylene. Most of the world's PGP monomer is currently derived from the more expensive Crude Oil slate or as a by-product of Ethylene production by cracking Ethane, and to a lesser extent other Natural Gas Liquids.
--The Plastics Exchange
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