From paints to plastics, a shortage of chemicals is igniting prices | Local company
In an economy shattered by the coronavirus, shortages and price spikes have affected everything from wood to computer chips. Even the toilet paper did not escape.
Today, they are cutting one of the humblest but most vital links in the global manufacturing supply chain: plastic granules that go into a vast universe of products ranging from grain bags to medical devices, from automobile interiors to bicycle helmets.
Like other manufacturers, petrochemical companies have been rocked by the pandemic and the way consumers and businesses have responded to it. Yet petrochemicals, which are made from petroleum, have also encountered their own problems, one after another: an abnormal winter freeze in Texas. Love at first sight in Louisiana. Hurricanes along the Gulf Coast.
All of them conspired to disrupt production and raise prices.
“There is nothing wrong,” said Jeremy Pafford, senior editor for the Americas at Independent Commodity Intelligence Services (CIHI), which analyzes the energy and chemicals markets. “It’s kinda crazy-a-mole – something’s wrong, it fixes itself, then something else happens. And it’s been like that since the start of the pandemic.”
The price of polyvinyl chloride or PVC, used for pipes, medical devices, credit cards, vinyl records and more, has climbed 70%. The price of epoxy resins, used for coatings, adhesives and paints, has climbed 170%. Ethylene – arguably the world’s most important chemical, used in everything from food packaging to antifreeze to polyester – has jumped 43%, according to figures from CIHI.