Hurricane Laura may cause up to $12bn in losses – analytical firm

HOUSTON (ICIS)–Hurricane Laura likely caused $8bn-12bn in insurable losses to property in Louisiana and Texas, a real-estate information provider said on Friday.

Out of the damages, 1/3 could be residential and 2/3 could be commercial, said David Smith, senior leader of science and analytics at CoreLogic. He made his comments during a presentation held by the company.

This split accounts for the office buildings, casinos and petrochemical plants in and around Lake Charles, Louisiana, which is about 50 miles (80 km) from where Hurricane Laura made landfall, Smith said.

Louisiana suffered most of the damage, he said.

CoreLogic is still developing models for any damage to offshore oil and gas platforms, Smith said. So far, it does not expect any significant damage. Because Laura strengthened so rapidly, it did not have time to form large waves that could cause a lot of damage to platforms.

Insured storm-surge losses contributed less than $500m of the total, CoreLogic said.

Meanwhile, more than 626,000 homes were exposed to tropical-force winds or higher, CoreLogic said.

Construction is an important end market for several chemicals and polymers.

The white pigment titanium dioxide (TiO2) is used in paints.

Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropnaol (IPA).

Blends of aliphatic and aromatic solvents are also used to make paints and coatings.

For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation.

Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols.

High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes.

Unsaturated polyester resins (UPR) are used to make coatings and composites.

Vinyl acetate monomer (VAM) is used to make paints and adhesives.

For VAM, while the do-it-yourself (DIY) segment for home construction has kept domestic demand up for end-use paints and coatings, prolonged lockdowns in the western hemisphere due to the coronavirus impeded a more substantial growth for the material’s many end uses.

As more countries come out of lockdown, demand for the product is seen slowly returning.

Hurricane Laura made landfall early on Thursday in Louisiana near the border with Texas. It was a category 4 storm with maximum sustained wind speeds of 150 miles/hour (240 km/hour).

Laura has since weakened into a tropical depression, with maximum sustained wind speeds of 30 miles/hour (45 km/hour), the National Hurricane Center said in its last update on the storm. As of 400 hours Central time (900 hours GMT) on Friday, Laura was 95 miles (155 km) west-northwest of Memphis, Tennessee.

A few tornadoes could form later in the day, the centre said. On Saturday, the storm should produce 1-2 inches (2.5-5 cm) of rain.

Now that the storm has passed, several chemical plants have begun to restart operations.

COMPARISON WITH RITA
Laura followed a similar path as Hurricane Rita, which made landfall in 2005, said Smith of CoreLogic. Laura was slightly east, so that affected which areas suffered the most damage.

Rita was a category 3 storm with maximum sustained winds of 115 miles/hour, Smith said.

At the time, Rita was a $6.4bn insured loss, he said. If it happened today, the total would be $13bn.

Additional reporting by Anna Matherne
Thumbnail image by Shutterstock
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