HOUSTON (ICIS)--The port of Charleston in South Carolina should expect increased volumes over the next few weeks as freight traffic is routed from Port Houston following Hurricane Harvey, the US Federal Reserve said in its Beige Book on Wednesday.
The Beige Book is a summary of economic activity during the past six weeks among the 12 Federal Reserve districts. It includes the Dallas district, which has all of Texas and the northern part of Louisiana, a region that has a significant portion of the nation's petrochemical plants and refineries.
The Fed noted that the report was based on information primarily collected before Hurricane Harvey made landfall.
Although the hurricane created broad disruptions to economic activity along the Gulf Coast, the Fed noted it was too soon to gauge the full extent of the impact.
Aside from the closure of business due to flooding, the Fed highlighted that one-fifth of the oil and natural gas production in the Gulf of Mexico went offline. Likewise, onshore producers in the Eagle Ford region temporarily stopped production, the Fed said.
Regarding fuel and petrochemical production, the Fed expects capacity and supply to remain tight in the southeastern US, especially due to pipeline disruptions.
The Fed said that contacts in its Richmond district, which includes some of the US east coast, indicated that spot freight prices jumped after Harvey.
Prior to Harvey, activity in the energy and natural resources sector was generally positive, the Fed said.
Manufacturers in the Richmond district noted stronger new orders, while ports and freight haulers were seeing increased volumes, the Fed said.
The Fed said that in Dallas district, economic activity grew moderately from the previous report. Manufacturing output strengthened, the Fed said, though demand for oilfield services was flat. Prior to the hurricane, crop conditions remained mostly favourable, the Fed said.
Refinery utilisation rates also increased along the US Gulf Coast prior to the storm, the Fed noted. Chemical producers in the area reported optimistic outlooks to the Fed based on feedstock cost advantages versus their international competitors.
In the Atlanta district, which contains the lower portion of Louisiana as well as Florida and Georgia, ports continued to indicate strong growth in containerised, bulk and breakbulk cargo. Total rail traffic in the district remained flat from the previous report, however. Declines were reported in petroleum and petroleum products, the Fed said, but were offset by increases in crushed stone, sand, gravel and coal.
The Atlanta district also reported increases in liquefied natural gas (LNG) exports, the Fed said.