The US Gulf Coast petrochemical industry was still feeling some lingering effects from Winter Storm Uri in February, and another weather-related event has heightened the levels of uncertainty again in early September. On August 29, Hurricane Ida made landfall near Port Fourchon, Louisiana, as a powerful Category 4 storm; ironically, it was 16 years to the day after Hurricane Katrina slammed into southern Louisiana in what is considered the costliest hurricane ever to hit North America.
It is too early to tally up the damage caused by Hurricane Ida across the United States. Remnants of the hurricane caused major flooding as well in the northeast US as heavy rains inundated cities including New York City and Philadelphia. In terms of overall impact on the petrochemical industry, Hurricane Ida seemingly will fall short of the wide-ranging disruptions caused by Winter Storm Uri. However, many sectors of the petchem industry have struggled to rebuild stocks since February due to a combination of strong demand and transportation problems (domestic and international). Another disruption, even for a short period of time, will further limit many companies’ abilities to maintain anything close to workable inventory levels well into the fourth quarter.
In Louisiana, efforts are ongoing to restore electrical power to residents and businesses, survey and assess damage to infrastructure and transportation links, and safely resume operations at petrochemical plants and refineries knocked off-line by the storm. It was understood most petrochemical plants suffered only minor damage, but the storm downed thousands of utility poles in the state.
The Mississippi River was closed to all barge traffic for at least a week, but passage has re-opened with restrictions in most locations. A majority of ports re-opened in early September, but again there were restrictions which will likely lead to delays. Finally, major flooding caused cessation of railroad activity across the area, and it is not clear when the rail networks will be fully operational. Transportation links within the United States were already strained as a result of strong demand, and the COVID-19 pandemic has exacerbated a growing shortage of qualified truck drivers.
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