Hurricane Harvey: What Is Its Effect On Our Industry?

This fall has seen some awful news in terms of natural disasters and the first was a one-two punch from Hurricane Harvey (which hit Texas) and Hurricane Irma (which tore through Florida.)

And Harvey is having some long-reaching consequences on the sports facility construction industry.

“Hurricane Harvey affected a significant portion of this country’s refining capabilities,” notes Jordan Fisher. “A lot of the petroleum-based raw ingredients used in the various coatings and turf are generated in this region. I have seen multiple business reports stating the effects and possible chemical shortages due to the hurricane, especially for the ethylene market.  Based on the reports, it sounds like it’s imminent once supplies on hand are exhausted. “

Reports around the nation bear this out. Bloomberg Markets notes that fully one-third of chemical production in the U.S. was disrupted by the storm and boosting prices and threatening shortages for basic industrial building blocks such as chlorine and ethylene. About 40 percent of U.S. ethylene capacity was at least temporarily shut down, PetroChemWire said in a report. Closed ethylene plants included facilities owned by Dow, Exxon Mobil, LyondellBasell Industries NV, Chevron Phillips Chemical Co., Royal Dutch Shell Plc and Ineos Group Holdings SA.

The Bloomberg article added:

It’s not yet clear that prices for ethylene and polyethylene will rise from the storm closures. Excess supplies were hanging over the market ahead of Harvey, and buyers are anticipating rising output from several new plants that have begun to come online, said Kathy Hall, editor of PetroChemWire. Plants maintain a cushion of inventory.

But it wasn’t just industrial chemicals – although those profoundly impact the sports facility construction industry. In late August, an article in the Washington Post noted a spike in gas prices. The flooding completely or partially shut down 13 refineries, erasing more than 10 percent — about 2 million barrels a day — of U.S. gasoline production capacity.

The area hit hardest by Harvey, the coastal swath from Corpus Christi to New Orleans, is one of the most industrialized petroleum regions in the world. One-third of the U.S. refining capacity is based there.

ASBA thanks Jordan Fisher for his input and also asks whether other members have seen an impact from the storms.

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