Supply dispute prompts Shintech to reduce PVC production in Texas

Shintech Inc. is running its PVC resin plant in Freeport, Texas, at reduced rates because of a feedstock supply dispute with Olin Corp.

The Shintech site had been supplied with VCM feedstock needed to make PVC from an Olin site in Freeport. Because of the dispute, Shintech has been bringing its own VCM to Freeport from a site in Louisiana, a Shintech spokesman said in a July 19 email to Plastics News.

"There is a lawsuit pending between Shintech and [Olin] to resolve certain disputes between the parties concerning the VCM contract," the spokesman added. "We are confident that in the end we will prevail on the merits."

The spokesman also said that, subsequent to the filing of the lawsuit, Olin agreed to supply full contract volumes pending resolution of the lawsuit. But Olin hasn't resumed supply of full contract volume, he added, citing the occurrence of "certain unforeseeable and unavoidable problems" in starting up its VCM production facilities in Freeport following a recent major maintenance turnaround.

"At this time, we do not know when Olin will resume full supply," the spokesman said. He added that Shintech has not placed any supply limits on PVC made in Freeport.

Officials with Olin could not be reached for comment. Shintech filed its lawsuit against Olin in the U.S. District Court in Galveston, Texas.

Houston-based Shintech ranks as North America's largest PVC supplier. Its plant in Freeport has almost 3.2 billion pounds of annual PVC production capacity, making it the largest in the region. Shintech is a unit of Shin-Etsu Chemical Co. Ltd. of Tokyo, which ranks as the world's largest PVC maker.

A report from data firm S&P Global said that Olin's VCM unit in Freeport supplies 50 percent of the VCM needed to run Shintech's PVC plant there. Olin operates roughly 1.8 billion pounds of annual VCM production in Freeport. The sites are connected via pipeline.

Clayton, Mo.-based Olin ranks as the world's largest supplier of chlor-alkali products. The firm also makes epoxy materials and is a global leader in production of ammunition for firearms through its Winchester unit. Olin posted sales of $9.4 billion in 2022.

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