Dow Chemical's Bahia Blanca petrochemical complex in Argentina will likely remain offline for the entire third quarter, it said Thursday.
"Late in the second quarter, there was a significant countrywide power outage in Argentina, which also spread to neighboring countries," it said in its second quarter earnings.
"The power outage abruptly shut down our ethylene operations. We have teams on the ground assessing the damage and beginning repairs. And our best estimate today is that the facility will be offline for at least the entire third quarter and is expected to have approximately $100 million impact on our results," Dow said.
On June 28, Dow Chemical's Bahia Blanca complex suffered an explosion in a cracker No. 2. Since then, operations have been stopped in the plant.
In the past week, the company had sent a letter to its customers saying it expected to have limited supply of some polyethylene products during six weeks - until the end of August. The company said it had begun to import products from Dow's production complexes in the United States and Europe.
According to sources and S&P Global Platts data, Dow Chemical Bahia Blanca complex has two crackers - cracker 1 with installed capacity of 275,000 mt/year and cracker 2 with installed capacity of 455,000 mt/year. The complex has six production plants: two for ethylene and four focused in polyethylene (HDPE, LDPE, LLDPE and EPE). The company does not disclose specific ethylene and polyethylene production data.
A local distributor said the company is importing ethylene and aims to resume its cracker 1 in the middle of August and the cracker 2 at the beginning of September. An US trader said he is moving polyethylene materials towards Argentina following the market's opportunity, adding margins are better than in other Latin American regions.
Dow was trying to restart some of Bahia Blanca plants offline since the June 16 power blackout that hit Argentina when the explosion occurred.
Top petrochemical producers in Argentina include Dow, state-owned YPF and Pampa Energia.
