Mishap at Exxon’s Baytown facility scuttles C2 Olefin derivatives supply

A fire mishap at Exxon’s Baytown facility in Texas on the 23^rd of December 2021 had led to the lowering of refinery run rates since the occurrence of the incident. Information from the Texas Commission on Environmental Quality revealed that the fire occurred at one of the unit’s hydrodesulfurization units.

The refinery possesses a capacity of processing half a million barrels of crude per day. Due to lower run rates the outputs from the downstream ethylene cracker and the olefins plant were affected. This could further impact the supply crunch usually faced by the C2 olefin derivatives market in the US post-holiday season when the demand sees a sudden surge.

The continuing global energy crunch coupled with the speculation regarding the impact of the new Covid-19 variant could exacerbate the logistical bottlenecks currently ailing the global chemical value chains. Suppliers around the US Gulf coast had expressed concerns over how the new variant could play spoil sport in the new year for the polyethylene market.

ChemAnalyst’s prior assessment of the US olefins market for the Q1 of FY22 could very well be revised upwards as Exxon’s litigation woes continue through into the new year. While the market is expected to revive in the first quarter, the first half of Q1 could see a less than expected recovery in the olefins market due to the sudden surge in the number of Omicron cases world over.