MIDLAND, Mich.—Dow Inc. has restarted a polyethylene resin plant in Argentina and will restart two additional PE units in Texas this month.
The Dow PE unit being restarted is in Bahia Blanca, Argentina. In early May, Midland-based Dow closed the unit as well as PE plants in Freeport and Seadrift, Texas, and two elastomers plants in Plaqumine, La. The move came in response to falling demand that resulted from the COVID-19 pandemic.
A company spokeswoman said in a July 8 email to Plastics News that the decision to reopen in Argentina was "based on current demand for polyethylene."
The Texas units will restart "throughout the month of July," she added. "We will continue to monitor demand in automotive and other durable sectors, and as conditions improve in those markets, we expect to bring our two elastomer units back online as well."
In total, the five plants represent about 10 percent of Dow's global capacity for those materials. No layoffs were connected to the temporary closings.
Recent improvements in PE demand, particularly from the packaging market, allowed North American PE resin makers to increase prices by an average of 4 cents per pound in June. That move canceled out a 4-cent price drop that had hit the market in April as demand fell. Regional PE makers now are seeking a 5-cent price hike for July.
In a May 18 interview, Packaging and Specialty Plastics President Diego Donoso said that the idled PE plants "can be ready to go if June is better" and that the elastomer plants were likely to be closed for 30 days or more because of the condition of the automotive market.
"We expect to have a good second quarter, but discipline is still the name of the game," he added. Donoso also said that feedback from customers played a role in the decision to close the plants and also would play a role in restart decisions.
Donoso added at the time that exports of PE from North America have remained strong during the COVID-19 crisis. The export market is important to Dow and other North American PE makers as a destination for a good portion of the new capacity they've added in recent years to take advantage of affordable shale gas in the region.
"All the (PE) material that needed to be exported has been exported," Donoso said.
Dow is one of the world's largest producers of PE and specialty plastics. The firm employs more than 36,000 worldwide and posted sales of approximately $43 billion in 2019.