Dow reduces polyethylene capacity in North America

Dow Chemical Co. will temporarily shut down approximately 885 million pounds of polyethylene manufacturing capacity in North America, due to continuing weak demand and increased feedstock cost pressures. This cut-back, coupled with capacity previously idled at Dow and its Union Carbide subsidiary, brings the total idled capacity to 1.4 billion pounds since mid-2001.
"Profits in the global petrochemical industry are somewhat dependent on running plants at high operating rates," says Bob Beil, commercial vice-president, Dow Polyolefins and Elastomers. "At this point in time, it is less costly for us to idle these plants than to run them."
Based on current demand projections, the company does not expect the reduction in capacity to affect customer supply.
A significant factor in the decision is a predicted volatility in natural gas prices over the winter which would further affect margins.