Petrochemical shortages are causing prices to skyrocket
Analysts are expecting petrochemical shortages to last well into 2022.
Petrochemical companies—like many other manufacturers—have been shaken by the pandemic and by the response from consumers and businesses. Coronavirus aside, petrochemicals, which are made from oil, have run into a unique set of problems, including a winter freeze in Texas, a lightning strike in Louisiana and several hurricanes along the Gulf Coast. These factors have disrupted production and raised prices.
The chemical shortages mean higher prices for many goods. The price of polyvinyl chloride (PVC), which is used for pipes, medical devices, credit cards and more, has gone up 70%. The price of epoxy resins, used for coatings, adhesives and paints, has soared 170%. And, according to ICIS figures, ethylene has surged 43%.
The recession that followed the pandemic caused pertrochemical producers, like many manufacturers, to cut production. The economy began to bounce back as a result of government relief aid and increased spending, but that didn’t fix the supply problem, and shortages are being felt most by big contractors.
According to AP News, problems in the petrochemical supply chain have been compounded by shortages of labor and shipping containers and by overwhelmed ports. Ports in Asia have been shut down by COVID-19 outbreaks, and U.S.-based ports are struggling with backlogs of ships waiting to be unloaded.
Analysts expect petrochemical shortages to last well into 2022.
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