Dow idles three polyethylene plants in US to slow inventory builds.

Petrotahlil — Dow Inc. will idle three polyethylene plants in the US for at least a month in response to the coronavirus pandemic, the company said in a statement obtained by Platts.

The locations include a solution PE train, a gas phase PE train in Texas, two elastomer units in Louisiana and a gas phase PE unit in Argentina, Kyle Bandlow, a spokesman for Dow said in an email Thursday.

"On an aggregate basis, the capacity of these five units is roughly 2 billion pounds annually, which is about 10% of our Packaging and Specialty Plastics business' global annual capacity. And we intend to idle them for at least 30 days," Bandlow said.

First-quarter sales in Dow's Packaging and Speciality Plastics unit, which includes PE, was down 10% at $4.6 billion.

Dow's decision to close plants is to avoid "a lot of material in inventory" until it sees a "good demand signal coming on the back end," said CEO Jim Fitterling.

The company is currently trying to balance out demand as need has slowed globally due to the coronavirus pandemic and people staying at home, he said.

"We're starting to get positive signs out of many states in the US for a May opening and some parts of Europe, like Germany, Austria, Switzerland," Fitterling said.

As confidence builds, testing will come along and people will be more certain about going back into manufacturing, and consumers will be back in the market, he added.

Once that point is reached and consumer confidence comes back, Dow plans to resume operations at the idled PE units to meet demand, Fitterling said.

Platts last assessed US low density polyethylene at $849-$871/mt FAS Houston, US linear low density polyethylene at $563-$585/mt FAS Houston and US high density polyethylene blowmolding at $596-$618/mt FAS Houston.

LLDPE and LDPE fell week on week Wednesday due to weak market sentiment and lowered demand, while HDPE spot prices remained flat as sources believe prices have settled at the bottom of the market.

Follow us on twitter@petrotahlil 

Platts 

END