Chemical Plant Maintenance Turnaround Activity to Continue Increasing in Third Quarter

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Researched by Industrial Info Resources (Sugar Land, Texas)--During the first half of this year, the Chemical Processing Industry (CPI) of North America has reinforced its strength and resilience by consistently increasing plant operating rates and the number of planned maintenance turnarounds. The number of planned maintenance turnarounds at CPI plants in North America increased sharply during the second quarter this year, compared to the same quarter in 2009. CPI maintenance turnaround spending during the second quarter is expected to reach $471 million--a big jump from the $350 million spent in 2Q09.

The quickly approaching third quarter of 2010 appears to be on track to exceed last year's performance for the same quarter with an increase in turnaround activity of 21%, equaling nearly 170 individual plant and/or unit turnarounds. Total investments for these turnarounds increased by an estimated 24%, to $365 million. As the CPI continues to build on the momentum of an improving general economy, operating rates are expected to continue to increase along with the momentum, in turn driving an increased number of planned maintenance turnarounds.

The Southwest market region will continue to play its traditional role as the largest contributor to maintenance-turnaround spending in the quarter, with nearly 50 turnarounds valued at almost $140 million.

Among the biggest regional improvements is the United States' Great Lakes market region, where 19 turnarounds are planned during the third quarter, totaling an estimated $55 million. The Great Lakes is home to a large number of specialty chemical producers that have benefited from the increased demand for electronic chemicals, coatings and niche products supporting the development of "green" products, such as lithium batteries and chemicals to process photovoltaic films for the Power Industry.

If the CPI remains on track, based on maintenance activity already witnessed this year, the industry will exceed the overall maintenance turnaround spending of 2009 by nearly 40%. Capital spending budgets are improving much slower and putting even greater pressure on plant owners to improve the reliability and efficiency on what they currently have. The trend of increased maintenance activity is being witnessed across almost every segment of the CPI and is expected to remain strong for the remainder of the year.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.