Gulf Coast Chemical Industry Consolidates for Stronger Year in 2010

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Researched by Industrial Info Resources (Sugar Land, Texas)--As recessionary pressures begin to lighten on the Chemical Processing Industry (CPI) and the general industrial market across the United States, the outlook along the Gulf Coast region for 2010 is quickly improving. The Gulf Coast represents one of the most essential regions for the CPI, with a highly integrated network of pipelines, feedstock, port access, and export markets.

Like many other industries in the region, such as petroleum refining and power generation, the CPI witnessed a massive wave of closures, consolidations and pullbacks this year. A glimpse at what to expect for the coming year, using projects identified as part of Industrial Info's North American Project Database, shows CPI spending is forecast to be up along the Gulf Coast in 2010 by as much as $767 million.

Nearly a dozen chemical plants permanently closed their doors in the course of this year with several of them being very large petrochemical plants such as the Chocolate Bayou plant of LyondellBasell Industries (Rotterdam, The Netherlands) in Alvin, Texas, and the Sunoco Incorporated (NYSE:SUN) (Philadelphia, Pennsylvania) plant in Pasadena, Texas. So far, the only permanent plant closure reportedly planned to take place in the region during 2010 is that of Gaylord Chemical Company LLC (Slidell, Louisiana) for their dimethyl sulfide and dimethyl sulfoxide plant in Bogalusa, Louisiana.

Overall spending is forecast to be up next year, with the largest gains being witnessed in increased maintenance spending activity. As plant owners begin to restart idle units and increase run times on processes that have been running at reduced rates during the past year, maintenance turnarounds for inspections, repairs and catalyst renewals are an immediate opportunity for equipment and service providers.

Grassroot construction will remain limited to only a few opportunities as the market regains a steady footing. Among the largest planned is that of SNF Incorporated (Riceboro, Georgia) in Louisiana. For more information, see October 21, 2009, article - Decision for New Polymers Plant in Louisiana Expected Soon.

Much of the project activity planned for 2010 is expected to be line additions and expansions that previously were delayed. There currently are more than 30 capital CPI projects planned in the region for next year that each amount to $20 million or more. If economics, including energy prices, continue to improve through the close of the year, the region could be set for a substantial rebound in 2010.

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Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.