Chemical Firms Shutter Production

LyondellBasell Industries and Hexion Specialty Chemicals are both curtailing chemical production in the face of weak demand.

LyondellBasell, which filed for bankruptcy protection of its U.S. subsidiaries in January, is closing a 480 million-lb-per-year high-density polyethylene plant in Chocolate Bayou, Texas, by the end of July. The company will lay off about 50 workers that ran the unit.

In March, the company closed an ethylene cracker complex on a nearby site in Chocolate Bayou. Vaughn Deasy, LyondellBasell's senior vice president of base chemicals and polyethylene, blames excess capacity and poor profits in the company's polyethylene business for the latest decision. "In the current market environment, with declining demand for polyethylene in the United States and diminishing export opportunities due to the expansion of global capacity, we are taking steps to rationalize capacity," he said.

LyondellBasell earlier closed low-density polyethylene (LDPE) units in Pasadena, Texas, and Fos-sur-Mer, France. And the company hasn't been alone in closing polyethylene capacity. Flint Hills Resources, the chemical and refining arm of Koch Industries, is shuttering an LDPE plant in Odessa, Texas, and Dow Chemical has closed an LDPE unit in Freeport, Texas.

Separately, Hexion says it will indefinitely idle a 190 million-lb-per-year bisphenol-A (BPA) plant in Deer Park, Texas. BPA is used to make epoxy resins, a major product line for Hexion, and polycarbonate. At the same time, the company is bringing a 310 million-lb-per-year BPA plant back online after it was down for maintenance.

"Continued soft demand for BPA as a result of the general economic downturn makes this a necessary move that will further improve the economics of our Deer Park complex," says Ian Harris, vice president of base resins for Hexion.