The February freeze that triggered mass blackouts in Texas led to chemical plant shutdowns that are disrupting global supply chains, causing a shortage of the raw materials needed for everything from medical face shields to smartphones.
The power outages brought the world’s largest petrochemical complex to a standstill, forcing more plants in the Gulf of Mexico region to shut down than during Hurricane Harvey in 2017. A month later, many remain offline, and analysts said it could be months more before all are fully back.
Prices for polyethylene, polypropylene and other chemical compounds used to make auto parts, computers and a vast array of plastic products have reached their highest levels in years in the U.S. as supplies tighten. For example, prices for polyvinyl chloride, or PVC, have more than doubled since last summer, according to S&P Global Platts.
That is expected to result in cost increases and delays for auto makers, home builders and countless other businesses, with impacts ultimately felt by consumers, according to companies and analysts. The shortages are part of a growing economic price tag of a storm that knocked out a third of natural-gas production in Texas and forced some chip makers to curtail output, exacerbating a semiconductor shortfall.
Honda Motor Co. said Wednesday it would halt production at most of its U.S. and Canadian car factories next week, citing supply-chain issues including the fallout from U.S. winter storms. Toyota Motor Corp. said it was recently informed that a shortage of petrochemicals will affect production at its car plants. Paint maker PPG Industries Inc. said a number of its suppliers have been affected by the problems in Texas. Container Store Group Inc. warned that the shortages could influence profit margins at the storage and shelving retailer.
John Schiegg, vice president of supply-chain services for David Weekley Homes, a Houston-based home builder, said he was being told by suppliers to expect shortages of everything from siding to adhesives to insulation. That will mean delays for home starts and further increases in costs for home buyers, which have been climbing in the midst of a housing shortage, he said.
Mr. Schiegg said that several manufacturers of PVC piping said shortly after the storm that they couldn’t fulfill their contractual obligations, but that he was surprised when other suppliers began warning of disruptions as recently as last week.
“We had no idea how much came from the Gulf Coast area,” Mr. Schiegg said. “I tell people it’s going to get ugly. There’s going to be a big fight for materials.”
Kim Anders, a supply-chain executive at the hospital buying group Premier Inc., said there is a shortage of the sharps containers that hold used needles because of big demand from vaccination efforts along with the disruptions. Hospitals have begun waiting until their sharps containers are full before throwing them out instead of weekly, Ms. Anders said.
Many chemical companies declined to discuss the status of their plants. A spokeswoman for Dow Inc. DOW 4.48% said it shut down several units in Texas and Louisiana because of the freeze.
“We expect these and similar product and supply chain impacts across the industry to create very tight supply balances across our key value chains,” the spokeswoman said.
The aftermath of the Texas freeze is adding to the problems facing a global supply chain that has been severely affected by the Covid-19 pandemic and has struggled to meet demand for the past year. The virus has caused a surge in purchases of many goods as consumers remain hunkered down at home, while making it more difficult to produce them, given enhanced worker safety rules and social-distancing requirements.