Plastic prices are forecast to soar even higher as Hurricane Ida disrupts petrochemical production along the US Gulf Coast. According to the US National Hurricane Center, hurricane Ida made landfall as a Category 4 storm in Louisiana on Sunday afternoon. It is expected to bring winds of up to 185 kmph, forcing petrochemical producers such as Exxon, Shell, Dow, Nova, and Westlake to shut their plants. This will likely threaten supplies of polymers used in everything from water pipes to toys.
Gulf Coast contracts for polypropylene (PP), polyvinyl chloride (PVC), and high-density polyethylene (HDPE) have already traded at all-time highs since the winter storm in mid-February amid brisk demand for manufactured goods. Polypropylene, which is used in carpet, furniture, and cleaning products, could surge by nearly 45% to $4,000 per ton if the storm knocked out a significant amount of supply for more than three weeks, industry analysts said. They warned that at such a rate, consumers could not easily afford the increased costs.
Petrochemical production facilities in the US Gulf have spent much of this year trying to recover from weather-related disruptions. The supply crunch was compounded by soaring demand for consumer goods and packaging. At the same time, the chemical industry is also reeling from global shipping constraints and surging freight rates.
