Hurricane Harvey’s Devastating Impact Turns Ethylene Into Rare Commodity

Texas accounts for three-quarters of U.S. output of world's most important chemical.

September 1, 2017 11:50 am
Hurricane Harvey Has Made Ethylene Into Rare Commodity
A road is covered by floodwater left in the wake of Hurricane and Tropical Storm Harvey on August 31, 2017 near Houston, Texas. Harvey, which made landfall north of Corpus Christi August 25, has dumped nearly 50 inches of rain in and around the Houston area. (Scott Olson/Getty Images)

You’d probably have to crack your college chemistry book to look up what ethylene is. But the colorless, flammable gas used in the production of plastics has quickly become a rare commodity in the wake of Hurricane Harvey’s path of devastation.

According to Bloomberg, Texas is home to three-quarters of the nation’s ethylene production and now much of that has been shut down by the storm. As a result, the nation’s current ethylene capacity has been cut by 61%. One expert estimates that full production of the gas might not pick back up again until November.

Just to give you of an idea of some of the products that could be affected by the paucity of ethylene: plastic bags, food containers, water bottles, foam insulation, antifreeze, textiles, PVC pipes, chewing gum, and sneaker soles.

“The combination of Harvey’s path, duration, and rainfall total is wreaking havoc with the supply side of the U.S. chemicals industry on an unprecedented scale,” Kevin McCarthy, an equity analyst at Vertical Research Partners, told Bloomberg. “We certainly haven’t seen anything quite like it in our 18 years of following chemical stocks on Wall Street.”

The global chemical industry is worth $3.5 trillion.


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