Much of the U.S. was hit by a winter storm and sub-zero temperatures, causing widespread power outages in Texas and other parts of the South, bringing freight movement across the country to a near stand-still, and causing multiple petrochemical manufacturers to declare force majeure. The timing of this storm could not be worse, as manufacturing was already constrained due to unseasonably high demand, tightness in raw material availability, and widespread logistical problems.
The snow and ice made for impassable roads in much of the country, causing multi-car pileups and highway closures. Trucking terminals and truck stops across the country remain shut down as of Wednesday, February 17 due to continuing freezing rain and power outages in many areas, and more winter weather is expected in the coming days. These shipping delays will only compound the backlog of freight volume that never quite eased up following the holiday season.
But shipping delays is only a fraction of the effect these winter storms are expected to bring, with perhaps the great concern on the plant shutdowns it has caused. The list of producers who have declared force majeure include LyondellBasell, INEOS Olefins, Polymers USA, Monument Chemical and OxyChem. It has been estimated that about 61% of U.S. ethylene capacity and 59% of US propylene capacity is currently shut down, further aggravating an already tight market for these products and driving jaw-dropping price increases.
ChemCeed is closely monitoring these situations, and as always, is prepared to help you minimize disruptions to your supply chain. In order to help us do so, if you are able to provide us with an order forecast for the next 90 days and allow for some flexibility when planning deliveries it will ensure things go as smoothly as they can.