On August 25, the hurricane "Harvey" attacked the state of Texas, the center of American petrochemical industry. This area's energy infrastructure has been mostly shut down to avoid the disaster. Especially this state, the Huston city, as the American oil refining and petrochemical center, has suffered unpredictable economic consequences: many local specialized factories were forced to close.
As reported, the hurricane "Harvey" caused the huge floods, already destroyed 11.2% of the country's refining capacity, and a quarter of the oil capacity in the gulf of Mexico USA, the Texas coastal ports were closed. In addition, more than one third of the nation's chemical production was forced to be shut down. This storm had a great influence on the petrochemical products.
Until now, the Hurricane "Harvey" has already cut down about a quarter of the oil production in the gulf of Mexico, where a half of America's refining capacity is concentrated in, and also one third of America's chemical production was been shut down, so as result, the oil prices go up, the polyethylene, PVC and other chemicals become shortage in the later period. This might produce a big effect o to the hygiene industry, because most of the raw materials in hygiene industry are produced by the petroleum, so might influence the raw materials of hygiene industry continuing rise in price.
Hurricane Harvey and the torrential rains, ruined wherever it arrived, already damaged two largest oil refining centers of the United States, destroyed 15% of the country's refining capacity, many petrochemical enterprises were forced to be shut down. It is worth noticing that the United States owned three sets of acrylic devices that total 71 million tons per year (about 59% of the overall U.S. acrylic capacity) declared shut-down due to the force majeure. In addition, American largest acrylic enterprise Dow is temporarily running, only maintains 60% to 70% loading work. And the logistics is under restrictions, the device might shut down at any time. So, these have any related with the SAP rising prices?
As we known, super absorbent resin (SAP) is important use in the hygiene production industry, as one of the important raw material for the sanitary napkins, diapers production, the price of SAP follow the rising price of oil and acrylic price. Meanwhile, the United States is the second largest producer of acrylic acid; it has a big impact on global supply. Therefore, as the U.S. oil production and refining capacity was impacted, it might cause the shortage supply of acrylic acid, acrylic acid prices will go up, then will leading the important raw material SAP price go up, also increase the cost burden of the hygiene products industry, especially the sanitary napkins and diapers manufacturer.
Non-woven fabric plays an important role in hygiene production industry especially in diapers and sanitary napkins. Non-woven’s raw material is plastic. It’s known as the plastic, Oil or natural gas is the raw material, through extraction, cracking into various petrochemical raw materials (monomer), and then through polymerization, through the polymerization reaction then gets the polymer resin.
As the media said, the hurricane has caused about a quarter of the oil and gas production disruption in the gulf of Mexico, 2.26 million barrels per day of Texas refining daily capacity was forced to suspend, the natural gas production capacity cut down about 2 billion cubic feet per day, about 3% of the current output. Therefore, the massive contraction of the oil and gas production capacity, will leading a rise in oil and gas price, the price of plastic that made by oil or natural gas as raw material will follow up, in the meanwhile the non-woven materials is increasing.
Breathable film, or polyethylene film, is refers to the film produced by the polyethylene raw materials. In addition, PE (polyester), one of the main types of plastic, is a polymer material synthesized from polyethylene. And ethylene is the most commonly used petrochemical products, mainly used in manufacturing plastics raw materials polyethylene.
According to the reports, In order to cope with the flood threats caused by Hurricane Harvey, some large-scale chemical factories were shut down; this will affect 37% chlorine and caustic production capacity that used to produce ethylene and other products. About 40% of the ethylene production capacity has been closed in America. This represents a potential shortage of ethylene products, the price may be on the rise, and the cost of breathable films used the polyethylene as raw material will follow the polyethylene increasing.
Up to now, about 40% in the petrochemical production capacity in the United States have been shut down, and this will lead to a shortage supply of some global chemicals production. Among them, the acrylic and ethylene are more seriously influenced. Shortage Supply of the raw materials, probably leading these petrochemical products keep increasing the price in the worldwide. The domestic hygiene production industry needs to prepare in advance, and actively deal with the raw materials price rising problem. Of course, for the domestic hygiene production industry, these are challenges and opportunities at the same time. The hurricane made big limited to the United States’ petrochemical productions, the global hygiene production industry will probably under the situation of the raw materials and products shortage supplying. It’s hopeful that the domestic hygiene production industry exports volume will be enlarge at the same time.