Polar Storms Paralyze Chemicals

February 19, 2021

MANY chemicals have been severely affected by the winter storms Uri and Viola that rocked the Gulf Coast region this week, including Propylene Oxide, Propylene Glycol, Hydrocarbons, Acetone, Isopropyl Alcohol, P-series Glycol Ethers, E-series Glycol Ethers, Chlorine, Caustic Soda, and Hydrochloric Acid, to name a few. The weather crisis has caused dozens of plant outages, a flurry of Force Majeure notifications, and in some cases a shortness of supply. Products are delayed as large percentages of US capacity are offline- Ethylene 65%, Propylene Oxide 49%, Ethylene Glycol 89%, and etc.

This historic winter storm in the Gulf Coast has further exacerbated an already tight situation on Propylene Oxide and derivatives- see: Rising Propylene Shifts Market for IPA, Other Chemicals. The further impact of the storms is likely to be massive on a market already at 10-year-highs, and could take many weeks to resolve.

For questions on how this will affect your chemical supply and/or price, reach out to a sales representative.

COVID-19’s Impact On Chemical Supply Chains

April 8, 2020 COVID-19

The global COVID-19 pandemic has resulted in significant impact on chemical supply chains. Here we take a look at some of the chemicals that have been affected:

Isopropyl Alcohol (Isopropanol)

Sanitization products such as Isopropyl Alcohol have experienced skyrocketing demand. Unfortunately, manufacturers are simultaneously dealing with problems that are preventing them from supplying at full capacity. While two US producers are experiencing production issues, another is having trouble with raw material Acetone supply. A fourth US producer is scheduled to restart production of IPA, but this material will take a few weeks to come online. Meeting this unprecedented demand is proving to be a challenge, and prices have increased sharply.

A concerning trend has arisen in the IPA market in these unusual circumstances. IPA is in some cases passing through the hands of many distributors before it is finally delivered to the end user. At CORECHEM, our goal is to maximize the speed of product to the end user.

Ethyl Alcohol (Ethanol)

The Ethanol market essentially functions as two separate markets- Fuel Ethanol and Chemical, Food, and Pharmaceutical Grade Ethanol (Ethanol). These two markets are currently experiencing opposite extremes.

Most Ethanol plant startups in recent years have been tooled for Fuel Ethanol, creating an oversupply situation in the Fuel Ethanol market. Now, significantly reduced demand for fuel is compounding the oversupply problem.

Ethanol used for sanitization is experiencing record high demand. Prior to the COVID-19 crisis, Ethanol supply / demand was balanced. Now, prices are rising and supply is tight. Unfortunately, it is not easy for a Fuel Ethanol plant to switch over to creating Ethanol for other purposes.

Acetone

After years of a supply glut, the US Acetone market is tightening up. Acetone is a raw material used to produce Isopropyl Alcohol, now in high demand. Also, anti-dumping duty determinations have been finalized on Acetone being imported from five countries, resulting in imports from these countries stopping in November 2019.

Glycerin

Glycerin, a common ingredient in hand sanitizers and hand soaps, is also experiencing supply constraints and increased demand.  Glycerin is a co-product of bio-diesel fuel. Diesel fuel has experienced a significant decrease in demand, due to reduced travel and an overall slowed economy. As a result of less bio-diesel fuel being produced, less Glycerin is being produced. Also, fewer imports are entering the the U.S. market. Price increases are taking effect, and expected to continue for some time.

Medium-Chain Triglycerides (MCTs)

Medium-Chain Triglycerides (MCT’s) is another ingredient in hand sanitizers and hand soaps, and is experiencing significantly increased demand. Overseas plants that produce MCT’s have been shut down for employee safety, resulting in supply constraints.

Sodium Hypochlorite (Bleach)

Although Sodium Hypochlorite is experiencing increased demand due to usage as a disinfectant, reduced demand in other market sectors, such as downstream plastics, may more than offset the increase. CORECHEM continues to monitor the Chlor Alkali market (Sodium Hypochlorite and co-product Sodium Hydroxide) for noticeable supply / demand shifts.

Reach out to your CORECHEM sales representative to further discuss how these or other chemicals may have been impacted by the COVID-19 crisis.