How Extreme Cold Weather Has Impacted Chemical Supply Chains
The recent bout of extreme cold weather across the Texas Gulf Coast has created a perfect storm of disrupted production and constrained supply, triggering significant price increases across several product segments that could continue into the second quarter.
Tilley Company is working hard to maintain product supply to its customers and is requesting as much lead time as possible for order delivery dates.
Why Is the Supply Chain So Tight?
The winter storms across Texas, the Gulf Coast and other parts of the country come at a time when the chemical and ingredient supply chain is already challenged due to the COVID-19 pandemic, which has resulted in lower operating rates.
As temperatures plummeted and snow continued to drop in Texas and the Gulf Coast in February, many chemical plants were forced to shut down, causing suppliers in the market to declare force majeure, which resulted in dramatic price increases.
Additionally, transportation networks — including trucking routes, railroads and waterways — across the country have slowed due to the recent severe winter storms, putting an even tighter clamp on chemical and ingredient supplies.
These price increases are expected to continue through the first quarter and carry into the second quarter, said Tilley Company Director of Sales and Business Development Bill Fluharty.
“All of this is happening as demand in many segments of the economy is increasing,” Fluharty said. “Tilley is committed to clear and transparent communications on the market developments, as well as our capabilities to service our customers’ requirements under these trying circumstances.”
The following chemicals and ingredients have experienced price increases due to recent winter storms*:
- Derivatives of ethylene oxide (EO) and propylene oxide (PO): +20%-25%
- Isopropyl alcohol (IPA): +15%-20%
- Methanol: +20%
- Phosphates & acids: +12%-20%
- Acetone: +30%
- White oils and petrolatums: +8%-10%
- Sodium benzoate: +10%
- Glycerin: +5%-10%
- Surfactants: +5%-10%
*The above estimates are based on market knowledge.
Work with Tilley
The entire Tilley Organization thanks its customers for their support, loyalty and patience as we work through these supply issues in the coming months.
If you have further questions or concerns, reach out to your account manager or a customer solutions representative by calling 1-800-638-6968.