Hurricane Ida Another Setback for Supply Chains, But…

September 16, 2021

…On a positive note, Ida was less devastating than the winter storms Uri & Viola last February.

(When supply chains have as many problems as they’ve had this year, yeah, we’re looking for the bright side!!)

It’s been a rough year for supply chains. Most recently, Hurricane Ida, a dangerous and major hurricane, made landfall in Louisiana on August 29. Ida caused widespread power outages, flooding and damage, including to many chemical production facilities. Not surprisingly, this has exacerbated the issues chemical supply chains were already facing. In addition to these primary issues, chemical plants have also been dealing with issues such as problems getting a consistent and reliable supply of feedstock materials since the storm. Although many plants experienced outages lasting weeks, the overall effect of the storm was less devastating than that of the winter storms Uri & Viola earlier this year.

Here we take a look at the effect Hurricane Ida had on some of the chemicals that were affected by the storm:

Chlor-Alkali (Sodium Hydroxide/Sodium Hypochlorite): Ida had significant impact to the chlor-alkali market, and numerous producers have declared Force Majeure following the storm. These producers had plants in the direct path of the storm, and shut down prior to the storm. Now the idled plants are waiting for raw materials and repairs. This has caused noticeable tightness in the Sodium Hydroxide market.

Isopropyl Alcohol (IPA): While we have seen some softening in the Isopropyl Alcohol market in recent months, Ida shut down 35% of capacity and appears to have halted the sliding trend.

Glycol Ethers: Glycol Ethers have been affected, as 23% of capacity went offline.

Potassium Hydroxide: The largest liquid Potassium Hydroxide plant in the world is in Louisiana and still not running due to power outage. After shutting down two days prior to Ida, it is expected to be online again soon.

Ethylene Glycol: Approximately 10% of capacity is offline due to Ida. Additionally, Ida affected nearly 60% of capacity for feedstock Ethylene Oxide. Ethylene Glycol supply has been short for most of 2021. While there has been considerable effort to rebuild inventories this year, this now likely won’t be possible before 2022.

In addition to plant closures, Ida has impacted logistics on other key commodities as well as many downstream chemical markets such as paints and coatings, plastics, and etc.

For more information about Hurricane Ida’s affect on your chemical supply, speak to a representative.

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.