Chemical Plant Turnaround Activity Increases in First Quarter as Project Values Decrease

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Researched by Industrial Info Resources (Sugar Land, Texas)--The number of planned chemical plant maintenance turnarounds during the first quarter of this year in the United States and Canada increased by more than 10% over the same period a year ago. Some of this increased activity is no doubt in response to the very low levels of demand witnessed during the start of the year. Although turnaround activity was up considerably, the level of investments in those turnarounds was down substantially for a total investment value of $142 million.

As the Chemical Processing Industry (CPI) began to witness the slowing economy having tangible effects on its own demand outlooks late last summer, many CPI plant owners timed their turnarounds for early this year to keep additional product off the market and to help keep inventories down. This meant some turnarounds took place ahead of their original schedule and others were kept offline longer to avoid building inventory during a depressed market. Planned maintenance turnaround activity is expected to continue increasing as plant owners find ways to reduce inventories while also carving away slowly at smaller capital projects that can be implemented during plant downtime. For related information, see March 27, 2009, news article - Chemical Industry Maintenance Spending Planned for Second Quarter Grows.

Generally, a chemical plant is down no more than once in a year for a major maintenance turnaround. Some are down only every few years based upon the life of catalyst or their ability to rotate vessel inspection requirements while keeping the plant running hot. Considering the health and short-term outlook of the CPI in North America, there will likely be an increased number of turnarounds taking place this year. These turnarounds will likely be related more to poor demand than maintenance necessity. Industrial Info is currently tracking more than 415 CPI plant maintenance turnarounds planned to take place during the remainder of this year based on projects identified as part of our North American Project Database. This represents nearly a 20% increase in maintenance turnaround activity for the remainder of the year. This provides an excellent opportunity for equipment and service providers who can identify cost savings and create efficiency gains.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.