Chemical Shortage Causes Skyrocketing Prices Of Paints, Plastics

In an economy upended by the coronavirus, shortages and price spikes have hit everything from lumber to computer chips. Not even toilet paper escaped. Now, they’re cutting into one of the humblest yet most vital links in the global manufacturing supply chain: The plastic pellets that go into a vast universe of products ranging from cereal bags to medical devices, automotive interiors to bicycle helmets.

Photo Insert: The price of polyvinyl chloride or PVC, used for pipes, medical devices, credit cards, vinyl records, and more, has rocketed 70%.

“There isn’t one thing wrong,” said Jeremy Pafford, managing editor for the Americas at Independent Commodity Intelligence Services (ICIS), which analyzes energy and chemical markets.

“It’s kind of whack-a-mole — something goes wrong, it gets sorted out, then something else happens. And it’s been that way since the pandemic began,” reported Paul Wiseman and Tom Krisher for the Associated Press (AP) on Sept. 30, 2021.

The price of polyvinyl chloride or PVC, used for pipes, medical devices, credit cards, vinyl records, and more, has rocketed 70%. The price of epoxy resins, used for coatings, adhesives, and paints, has soared 170%.

Ethylene — arguably the world’s most important chemical, used in everything from food packaging to antifreeze to polyester — has surged 43%, according to ICIS figures.

The root of the problem has become a familiar one in the 18 months since the pandemic ignited a brief but brutal recession: As the economy sank into near-paralysis, petrochemical producers, like manufacturers of all types, slashed production.

So they were caught flat-footed when the unexpected happened: The economy swiftly bounced back, and consumers, flush with cash from government relief aid and stockpiles of savings, resumed spending with astonishing speed and vigor. Suddenly, companies were scrambling to acquire raw materials and parts to meet surging orders.

Panic buying worsened the shortages as companies rushed to stock up while they could. Against the backdrop of tight supplies and surging demand came a series of events that struck Pafford as Murphy’s Law in action: Anything that could go wrong did. In 2020, Hurricanes Laura and Zeta pounded Louisiana, a hub of petrochemical production.

Then, in February, a winter storm hit Texas, with its many oil refining and chemical manufacturing facilities. Millions of households and businesses, including chemical plants, lost power and heat. Pipes froze. More than 100 people died.

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