U.S. Chemical Industry Sees Increase in Maintenance Spending in 2013

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Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Chemical Processing Industry (CPI) sees ups and downs in maintenance turnarounds from year to year. Recently, there has been an ebb and flow, with spending and activity peaking every other year. Nevertheless, maintenance activity has remained strong in 2013. The U.S. CPI is on track to complete 599 maintenance turnarounds in 2013 with an investment of almost $1.4 billion, 342 of which are scheduled to occur in the final four months of the year.

The majority of the spending is in the Southwest market region, with 255 turnarounds worth approximately $855 million. There are 81 turnarounds still planned to occur in this region by the end of the year, because the fall season is typically a busy time for maintenance. The Southwest region features the turnarounds with the highest investments, $20 million of which are scheduled to be completed in October.

A 60-day turnaround is planned on one of Westlake Chemical Corporation's (NYSE:WLK) (Houston, Texas) linear, low-density polyethylene units in Longview, Texas. A month-long turnaround is planned for Shell Chemical's (NYSE:RDS.A) (Houston, Texas) heavy olefins unit in Deer Park, Texas, and LyondellBasell Industries (NYSE:LYB) (Rotterdam, The Netherlands) is set to perform a 60-day polyolefin turnaround at a plant in Lake Charles, Louisiana.

The spending on turnarounds is expected to increase in 2014 to almost $1.7 billion, which is one of the highest annual totals the U.S. CPI has seen. Due to the increase in market demand, plants have been running at higher operating rates, which increases the need for maintenance turnarounds.

Each year, there are two major fluctuations in turnaround investments in the spring and the fall, typically June and October. 2014 will be no exception, as there are 49 turnarounds scheduled to be completed in June, with spending reaching $289 million, and 130 turnarounds completing in October, with a total investment of $285 million. The high investment total for June is primarily due to a 90-day vinyl co-monomer (VCM) turnaround at The Dow Chemical Company's (NYSE:DOW) (Midland, Michigan) plant in Freeport, Texas, which is expected to reach $130 million, as well as Dow Chemical's Hydrocarbon 1 unit turnaround at the Taft plant in Hahnville, Louisiana, where spending is to be approximately $70 million.

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