- Plastics plants in Texas are still recovering from Winter Storm Uri, and it’s causing a plastic shortage.
- Homes, devices, and even medical supplies are affected.
- The storm caused $US150 ($194) billion in damages, mostly to Texas, AccuWeather estimated.
- See more stories on Insider’s business page.
Plastics plants are still recovering from the winter freeze that struck the Gulf Coast last month, and it’s leading to rising prices and a shortage of materials for everything from homes and cars, to smartphones and face masks, the Wall Street Journal reported.
Winter Storm Uri, which struck Texas in mid-February, devastated the state, leaving millions of residents without power and clean water for nearly a week. Dozens of people died. AccuWeather has since estimated the storm’s damages — which included crop losses, power bills, water disruption, burst pipes, loss of life, lost wages, damaged infrastructure, and business and school closures — at $US150 ($194) billion, with most of that from the state of Texas alone.
The storm’s impact is reaching the country and globe now, as many petrochemical plants in the state struggle to re-open, compounding shortages already created by the 2020 hurricane season, WSJ said.
The freeze in Texas, which is one of largest exporters of plastics and other petrochemical products, caused production of 75% of polyethylene, 62% of polypropylene, and 57% of PVC to shut, the Journal said, citing S&P Global Platts. Re-opening the plants, the Journal noted, is a painstaking and dangerous process that takes more than the flip of a switch.
Prices for polyethylene and polypropylene saw their biggest jump in 10 years, and they likely won’t ease until closer to the end of the year, which in turn means higher spending costs for consumers, WSJ reported.
“It’s going to get ugly. There’s going to be a big fight for materials,” John Schiegg, vice president of supply-chain services for a Houston-based home builder, told the Journal.
In Texas, Citigroup has set up warming centers for thousands of workers while Schwab is directing staff to lodging and transport. Here’s how Wall Street is reacting to the disaster in the Lone Star State.
Plastics are used in everyday items like cell phones, cars, TVs, computers, and homes. They’re also essential to the COVID-19 pandemic, with face shields and even sharps containers, which hold used needles after vaccination, using plastics, the Journal said.
The shortage could even extend to the real estate sector. During the pandemic, homes became a hot buy as people sought more space for their work-from-home environments. That pushed prices higher in the housing market and caused a shortage. The higher prices and shortages, the Journal said, may now be compounded by a lack of materials needed to build houses.