Two different Coasts within the US, experience the chaos of hurricane season just days apart. Now Texas and Florida are left with the aftermath of trying to pick up the pieces and rebound from the destruction. As previously mentioned on our Pharma Freight Impacts of Hurricane Harvey and Hurricane Irma’s Impact on the Pharma Supply Chain blog posts, these storms caused a huge disruption to shippers and carriers in this region.
HURRICANE HARVEY: Hurricane Harvey shut down about 37% of US chlorine and caustic soda, salt derived chemicals production and 40% of US ethylene production. Ethylene is the major building block that goes into plastics production. As a result, a number of industries and companies are being impacted by this. The impacts on commodities could result in higher price levels.
All indications seem to indicate that there will be only a near term impact on supply from this region and that the most direct impact will be short-term disruption in product shipping from this region and some price upward movement due to this resource capacity temporarily removed from market supply. -Ascend declares force majeure on Chocolate Bayou acrylonitrile (ACN), hydrogen cyanide (HCN) and disodium iminodiacetate (DSIDA).
HURRICANE IRMA: While Hurricane Irma, caused a slew of power outages and a number of delays as business were shut down, the commercial impact will be less dramatic on the chemical industry. The Keys and Tampa area were most widely impacted and in terms of actual producers or raw materials, there is minimal concern.
As both hurricanes have dissipated, locals and business are trying to regain the momentum and restore the regions that were destroyed by the storm. By most accounts, the damage to residential homes is far more of a worry than the ultimate impact on the chemical market. We will continue to monitor the situation and give updates on the impacts it has on various industries.