To celebrate the 20th anniversary of
No. 13: Hurricanes and accidents
Out of necessity, the North American resin market has shown its ability to survive hurricanes, accidents and war over the past 20 years.
Hurricanes have been at the forefront of recent memory, as Hurricanes Katrina and Rita struck the U.S. Gulf Coast — where most of the region's resin production is located — in fall of 2005. At one point, almost 70 percent of the gulf's resin production was offline.
That number was exceeded in 2008, when Hurricanes Gustav and Ike blew through the area once again. Resin makers were better prepared that time around, and the path of the storms wasn't as deadly. Plants went down, but quickly recovered.
That wasn't the case in 2005, when extensive damage and lengthy shutdowns sent resin prices soaring, affecting markets for the remainder of 2005 and on into 2006. In 2008, the impact on pricing was minimal, and wasn't enough to stop prices from plummeting as oil-based feedstocks fell a month later.
Lessons were learned at many places, including Baytown, Texas, where BayerMaterial Science LLC lost production for a week in 2005.
“We learned our lessons in 2005,” BMS President and Chief Executive Officer Greg Babe told Plastics News in July 2006. “You think you're prepared, then when it really hits, you see some weaknesses. You have to learn how to use and optimize your network, and you have to know logistics to ensure continuity of supply.”
Earlier storms, like Hurricane Hugo in 1989 and Hurricane Andrew in 1992, affected the plastics market to lesser extents. Hugo had an impact on medical molders in Puerto Rico, while Andrew prompted PN to offer free classified ads to affected companies, as we also did more recently with Katrina.
Explosions and accidents — some of which prove fatal — also remain an occupational hazard of any industry where volatile chemicals are involved, and plastics has been no different. The most devastating event of the past two decades occurred Oct. 23, 1989, in Pasadena, Texas, when a massive explosion at a plant operated by Phillips Petroleum Co. resulted in 23 deaths and more than 300 injuries. The disaster also wiped out 1.4 billion pounds of high density polyethylene capacity — roughly 18 percent of the North American market.
“You can't imagine the mass destruction,” Phillips executive Don Brady told PN when recalling the event in 1999. “Big beams of steel were twisted like you see in a war movie after someplace has been bombed.”
Phillips rebuilt the site, but a smaller plant making K-resin in Pasadena was hit by tragedy in 1999, when an explosion resulted in two deaths.
Most recently, five workers were killed and three injured when a PVC resin plant operated by Formosa Plastics Corp. USA in Illiopolis, Ill., exploded in April 2004. That plant has since been closed.
The winds of war also have affected resin markets in the past 20 years. When the U.S. battled Iraq during Desert Storm in 1991, resin prices soared as a result of fear of discontinued oil supply. The impact wasn't quite as extreme when the U.S. invaded Iraq in 2003, but the possibility and fear were there again.
Resin makers sometimes found opportunity amid the military buildup. Thermoset plastics and other specialty polymers often are in demand during wartime because of their inherent strength and resistance to heat and chemicals.
“There's definitely a heightened awareness of the needs for these products,” Dennis Dell'Accio, sales and marketing manager for specialty polymer maker Rogers Corp., said after the United States' post-Sept. 11 attack on Afghanistan in 2001. “The military will be refurbishing a lot of helicopters, including some dating back to Vietnam. That could require replacement parts made from our materials.”
Frank Esposito is a