Hurricane Harvey News
Hurricane Harvey made landfall in Texas on August 25 as a Category 4 storm. This was the first Category 4 storm to hit the United States in over a decade. Over 50 inches or rain were dumped in an area east of Houston, Texas, resulting in flooding and significant property damage. Our thoughts and hopes for safety and a speedy recovery are with all those affected by this devastating storm.
From a business perspective, we feel that it’s important for Formtech to communicate the storm’s effects to the petrochemical industry, as you will likely see an impact to your business. Hurricane Harvey’s impact shut down more than half of the ethylene production capacity in the United States. This chemical is a critical building block for many types of plastic materials. As of early September, the disruption was impacting both supply and pricing of plastic materials; it is expected that supply tightness will worsen and costs will increase before improvement is seen in either area.
Check back here often to keep up to date on the impact of Hurricane Harvey on the plastics industry.
Swift Plastics Recovery Expected After Latest Post-Harvey Updates
Hurricane Harvey’s devastation has had the plastics industry wondering how long Harvey’s effects would impact material costs and availability, but updates from both Houston-based PetroChemWire and U.K-based Wood MacKenzie are indicating the possibility of a faster recovery than originally estimated.
For more information and specifics, contact us or read the article from Plastic Technology, “Latest Post-Hurricane Harvey Updates Signal Swifter Recovery.”
Texas Transportation Affects Material Pricing And Availability After Harvey
The three major railroads in the Texas areas affected by Hurricane Harvey (Union Pacific Railroad, BNSF Railway, & Kansas City Southern Railway) are back up and running as of a September 13 report, but service delays are expected due to freight backlogs and trains under repair.
Polyethylene pricing has allowed producers to enforce a four-cent increase effective as soon as September 15 or October 1, depending on the supplier. Polypropylene has been reported to have seen a seven to eleven-cent increase.
To learn more, contact us or check out Plastic News’ article, “Post-Harvey, rail, trucking issues are impacting markets.”
PC Supply Availability Worsened due to Harvey
Hurricane Harvey may further affect supply of polycarbonate (PC) material, which was already tight before the storm hit Texas late last month.
Previous supply concerns were based on suppliers who have had computer system and manufacturing challenges. This paired with plants affected by Harvey now threatens supplies of PC, especially if feedstock, energy, transportation, or personnel availability does not recover quickly.
To learn more, contact us or check out Plastics News’s article, “Polycarbonate supplies might be tight after Harvey”.
Recovery Efforts begin after Hurricane Harvey
PetroChemWire is reporting that some progress has been made in terms of the petrochemical industry’s recovery since Hurricane Harvey. On Wednesday, the Corpus Christi port reopened, which will allow for some local refineries to restart operations. Railroad yard repairs are ongoing.
Material availability remains a concern as one supplier for styrene and one supplier for PVC have declared force majeure. In addition, proposals for cost increases remain in place, and are likely to take effect soon.
To learn more about recent recovery efforts and plant specific updates, contact us or visit Plastics Technology’s article, “Harvey Update: Partial Reopening of Ports and Rail System Underway”.
Hurricane Harvey Impacts Supply of Plastic Materials, Raises Costs
With over 60% of U.S. ethylene capacity down as a result of Hurricane Harvey, the plastics materials market expects that reduced supply will be an issue in the coming weeks.
Some suppliers have declared force majeure sales limits due to production limitations, as companies begin to clean up from the storm and assess the path to recovery. Some plants expect that will not be operational for an extended period of time. Workforce availability is also a concern, and infrastructure issues – including road, rail, and power problems – will likely contribute to downtime.
Other firms are also beginning to pass resin price increases. As of September 4, polyethylene suppliers passed three or four cent per pound increases while PVC producers announced a five cent per pound increase effective October 1. Some industry professionals believe that the resin cost increases could be more significant and longer in duration than after previous hurricanes.
To learn more, contact us or visit Plastics News’s website to read “Materials Markets Expect Reduced Supplies After Harvey”.