Texas Storm Sets Off Global Plastic Shortage

The massive February storm that shut down numerous oil refineries has significantly impacted petrochemical plants, causing extensive disruptions in the global plastic supply.

The rolling blackouts that wreaked devastation across Texas have brought production at petrochemical plants to a standstill. Now, a month later, many of those facilities have yet to resume production, and manufacturers are bracing for the worst: it could be months before they are fully restarted.

As a result, prices for numerous chemical compounds such as polypropylene and polyethylene have been sent soaring to the highest level in years. Prices for low-density polyethylene film, which is used to make bread bags, shipping sacks, and paper towel overwrap, have almost doubled since the onset of the pandemic. Similarly, prices for linear low-density polyethylene, which is used for plastic wrap, containers, and flexible tubing, have surged to levels not witnessed in over 15 years.

Although the plastic shortage in the Gulf Coast has sent individual plastic prices soaring, demand continues to add overwhelming pressure on continued supply disruptions. Cost increases— which will ultimately be passed down to consumers— are likely going to result, especially as automakers, home builders, and various other businesses experience delays in production.

On Wednesday, Honda Motor Co. announced it would cease production at several of its Canadian and US plants this week, citing supply-chain disruptions as the reason behind the move. Toyota Motor Corp also revealed that production at its factories will be affected by the petrochemical shortage, while PPG Industries Inc, a US-based paint supplier, also said its inputs have been adversely impacted by the Texas storm.

The large-scale impact of the Texas freeze is compounding many of the ongoing problems facing global supply chains in wake of the Covid-19 pandemic. Countless producers have been struggling to meet demand and eliminate bottle-neck shortages, but ongoing Covid-19 infections and enhanced social distancing measures continue to curtail the effort.


Information for this briefing was found via S&P Global Platts. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Baselode Energy To Acquire Forum Energy: The Merger Of Equals Deal

TriStar Gold: The Revised Castelo de Sonhos Prefeasibility Study

Gold is Up 30%, But the Real Bull Market is Only Starting Now! | Adrian Day

Recommended

ESGold To Expand Mine Building At Montauban In Advance Of Gold & Silver Production

Goliath Resources Expands 2025 Drill Program To 60,000 Metres

Related News

Is Canada’s Oil Sector Set For A Revival With The Trans Mountain Pipeline Expansion?

The Canadian oil industry is poised for a significant boost with the nearing completion of...

Tuesday, February 27, 2024, 12:40:00 PM

Cartel Clash: Saudi Arabia, OPEC+ Members Argue Over Oil Production Quotas

In a high-stakes battle for oil dominance, tensions erupted within OPEC as Saudi Arabia and...

Monday, June 5, 2023, 08:20:00 AM

OPEC+ Announces Surprise Oil Production Cut Exceeding 1 Million Barrels a Day

OPEC+ has made a surprising announcement of an oil production cut exceeding 1 million barrels...

Sunday, April 2, 2023, 11:44:50 AM

Brace Yourself: Russia Limits Kazakhstan Oil Shipments To Europe

While oil prices are already at highs, it seems the potential hikes are far from...

Monday, June 20, 2022, 10:58:00 AM

Gold, Oil Jump Following Uncertainty In Middle East

The price of gold and oil has rallied this morning off the back of continued...

Friday, October 13, 2023, 09:02:13 AM