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Orthoxylene & Phthalic Anhydride The Bumpy Road To Recovery
Ben Edmunds : Oct 7, 2021 12:00:00 AM
The orthoxylene and phthalic anhydride supply chain has shown relatively strong recovery throughout 2021; however, this has not been without its setbacks. As the US and Asia experienced various long and short-term challenges over the past year, ripple effects were felt throughout the petrochemicals industry across the world. These challenges have ranged from the ongoing battle in China to keep COVID cases low and import/export business flowing, to the Big Freeze, floods and Hurricane Ida repeatedly agitating transportation and crude oil prices in the US. Despite these issues, it seems market participants have become accustomed to careful planning following the rough effects of the 2020 market. For the most part of 2021, demand has been strong across the board as end-use industries slowly but surely pushed for the return to business as usual. Some downstream sectors managed to recover more than others with the construction industry in particular showing very strong activity all year as well as strong performances from plasticizers and even the UPR markets by the end of Q3.
The automotive industry is by far the worst hit end-use market, not only by the effect of the pandemic and poor consumer sentiment but also by the crippling impact of the ongoing global semiconductor chip shortage. By the start of 2021, operating under the pressure of the pandemic had become the new norm, and thus the first major challenge faced by the US market was the Big Freeze that hit southern states, particularly Texas, in mid-February. The winter storm saw wide-spread power outages, causing practically the total paralysis of the US petrochemical supply chain, with some US Gulf Coast petrochemical facilities still recovering months after the bulk of the incident. Not only were orthoxylene capacities themselves idled, disrupting supply, but some plasticizer plants were also affected, thus impacting orthoxylene and phthalic anhydride demand as well.