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Chemical market whack-a-mole

ICIS, Uncategorised
By Jeremy Pafford on 18-Sep-2020

Anyone ever play whack-a-mole?

The image here comes from the 1990s, a time of ill-fitting T-shirts and no smartphones, so entertainment came from games such as whack-a-mole that sprung up (literally) to test our hand-eye coordination as well as our ability to deal with a new problem cropping up just as soon as we had dealt with another.

It feels like the North American chemical industry is dealing with its own version of whack-a-mole at the moment, with tropical weather systems creating force majeures, force majeures leading to downstream issues, only to be followed by more tropical systems and force majeures. It’s enough to leave you with a similar look as that boy in the blue shirt.

First there was Laura a few weeks back, whose effects on southwestern Louisiana and ethylene, ethylene glycol, polyethylene and polyvinyl chloride markets continue to reverberate, including a wide swath of force majeures.

Next there was Sally, which this past week inundated the Mississippi, Alabama and Florida Panhandle coastlines with more than 2 feet of rain. It has disrupted a great deal of port activity in that region, and there is a significant amount of chemical and plastics producers/extruders in the Mobile, Alabama and Pensacola, Florida area.

If that wasn’t enough, there’s a tropical depression in the US Gulf’s Bay of Campeche that is expected to at least become Tropical Storm Beta (because we just ran through the English alphabet for storm names and are into Greek alphabet now) by this weekend and perhaps strengthen into a hurricane. It’s expected to meander in the western Gulf a bit before finally finding a real steering current next week. Estimations are that it will mostly be a heavy rainmaker, but where that rain falls and over what period of time is highly uncertain at this time. Those from Corpus Christi, Texas up through Houston and across to Louisiana need to be watching this developing storm for potential impacts next week.

The value of ICIS News constant updates and insights into macro and micro market ramifications from events such as the Atlantic hurricane season has never been more prevalent than right now. Each value chain that we cover – from plastics converters to FMCG/brand owners to electronics to construction to retailers – will feel the effects of the force majeures and supply chain disruptions caused by these storms, and ICIS News is delivering crucial, timely insights to help our clients make better decisions amid the fallout.

In this current game of market whack-a-mole, ICIS News puts a giant mallet at our clients’ disposal, helping them navigate through these unsettling times with a bit more confidence.

Disclaimer: The views in this blogpost should in no shape or form be taken as actual forecasts and are my personal views only.

More trouble brewing in the Gulf of Mexico.