Plastic resins are among goods exported through Port of Houston container terminal facilities.
With its proximity to production and packaging facilities, as well as its proliferation of global ocean carrier services, the Port of Houston is the natural preferred hub for U.S. exports of plastic resins.
It should come as no surprise, then, that the Port of Houston boasts a 75 percent share of the nation’s waterborne exports of polyethylene, or PE for short, according to John A. Moseley, senior director of trade development at the Port of Houston Authority.
“We are continuing to crush all other U.S. ports in polyethylene exports,” Moseley told the American Journal of Transportation. “Despite other ports’ and the railroads’ efforts to grab market share from Houston, we continue growing and expanding our share as the preeminent leader in resin exports.”
As Port of Houston economic analyst Jordan Frisby shared in detail with AJOT, the busiest U.S. foreign tonnage port is perfectly positioned to build upon this leadership role.
“Houston’s strength in exporting resin comes from its proximity to many of the nation’s PE plants located in southeast Texas and southwestern Louisiana,” Frisby said, adding that Houston’s well-developed export infrastructure features numerous plastics packaging plants, including those of Belgium-based Katoen Natie, Germany-based DHL Supply Chain (formerly Exel), Pasadena, Texas-based Frontier Logistics LP and Houston-based Packwell Inc. Several of those operations are now expanding.
Meanwhile, new and expanded plastics plants are springing up near the Port of Houston, advanced by such petrochemical giants as Exxon Mobil Inc., The Dow Chemical Co., Chevron Phillips Chemical Co. LLC, Formosa Plastics Corp. and a joint venture of Sasol Ltd. and Ineos Group.
“The first of these is expected to come online this fall,” Frisby said. “Much of this new product is expected to be exported. We are anticipating an increase in PE exports in the hundreds of thousands of containers in the late 2016-to-2020 timeframe. Exactly how much growth occurs depends on a variety of market factors.”
Frisby said the resin export market, including PE and related commodities such as polyvinyl chloride, or PVC, is “very volatile,” commenting, “Small shifts in the exchange rate and foreign country spot markets can produce large swings in U.S. export volumes.”
That said, PE exports have been surging since early 2015, peaking in the first quarter of 2016, while, according to Frisby, PVC exports “have rolled up and down around a more steady average over the same period.”
“The port has seen a major increase in plastic export containers since early 2015, but there has been no impact on our service level because we have invested significantly in continuing to build out and upgrade our container terminal facilities as needed,” he said, adding that Port of Houston infrastructure enhancements also include the almost-finished project to bring the ship channel to 45-foot depth.
Market volatility is a factor as well when it comes to where the resin is headed, Frisby said, noting that PE from Houston typically flows to Latin America and Europe but that East Asia is emerging as a receptive market with significant upside. PVC, he said, generally is shipped to Latin America, Europe and the Middle East.
Wherever the commodity is going, the Port of Houston has things covered with container services to all points around the world, including all-water services running three times a week to East Asia.
These days, the majority of the product is exported in containers, often in 25-kilogram bags that are palletized and shrink-wrapped. Other options include containerized supersacks and a method known as “sea bulk,” through which pellets are blown directly into a container that has been fitted with a special waterproof liner.
In addition to the petrochemical companies directly, exporters of the resin commodities include many third-party traders.
Frisby said he believes many resin producers are unnecessarily concerned about sufficient availability of empty containers in Houston.
“In the period of 2006 to 2014, loaded exports significantly exceeded loaded imports in Houston,” he said. “However, in the past two years, this gap has closed, and loaded imports and loaded exports are very close.
“Historically, shipping lines imported high volumes of empty containers into Houston to serve surging resin exports when there was a big gap between loaded exports and loaded imports,” Frisby went on to say. “The lines are highly likely to import high volumes of empties again if and when needed.”
The Port of Houston Authority once again expects hundreds of petrochemical and transportation executives to take part in the next PHA Synthetic Resin Symposium, slated for Jan. 24. They should have plenty to discuss.
For more than a quarter of a century, Paul Scott Abbott has been writing and shooting images for the American Journal of Transportation, applying four decades of experience as an award-winning journalist.
A graduate of Northwestern University’s Medill School of Journalism, with a master’s magna cum laude from Trinity Evangelical Divinity School, Abbott has served as president of chapters of the Propeller Club of the United States, Florida Public Relations Association and Society of Professional Journalists.
Abbott honed his skills on several daily newspapers, including The Cincinnati Enquirer, The Richmond (Va.) News Leader, Albuquerque Journal and (South Florida) Sun-Sentinel, and was editor and publisher of The County Line, a weekly newspaper he founded in suburban Richmond, Va.
A native Chicagoan, he is a member of American Mensa and an ever-optimistic fan of the Chicago Cubs.
