Manufacturing firms, including plastics and petrochemicals makers, continue to struggle with drought conditions in Mexico.
"Amid one of the most severe droughts in Mexico's recorded history, several parts of southern Tamaulipas state, which borders the U.S., have been impacted, resulting in limited or halted manufacturing," according to a recent report from consulting firm Everstream Analytics of San Marcos, Calif.
On May 22, authorities in Altamira halted water supplies to at least 74 industrial sites and eight petrochemical plants.
The Everstream Analytics report said the shutdowns could affect U.S. petrochemical production, since Tamaulipas is home to key suppliers to several downstream production processes, including production of PET resin.
There are also concerns that industries like medical device, electronics and automotive manufacturing may be impacted because of the concentration of suppliers in Tamaulipas.
The latest plastics supplier to confirm that its manufacturing has been impacted by the drought is Boston-based Cabot Corp., which makes carbon black additives in Altamira.
On June 14, a Cabot spokesperson told PN that the plant is operating under force majeure sales limits.
"Over the past weeks, the water supply to our Altamira plant has deteriorated in both quantity and quality," the spokesperson said. "Consequently, our plant is currently unable to operate all production units and is running limited production, along with warehouse, packing and shipping operations.
"Due to this situation beyond our control, Cabot has declared a force majeure event for carbon black from this facility. We are actively evaluating recovery options to restore full production at our Altamira plant, as well as exploring all possible import options from other Cabot facilities to supplement our inventory in Altamira."
Recent market reports have indicated that DAK Americas and Indelpro also have been affected. Officials with those firms could not be reached for comment.
Plastics News has previously confirmed that plants operated by Saudi Basic Industries Corp., Ineos Styrolution, Orbia Advance Corp. and Chemours Co. had been hit by the water shortage.
Tamulipas state government on June 5 announced a state of emergency for the cities of Altamira, Madero, and Tampico, where both residential and industrial water supply is now limited. Tamaulipas Governor Américo Villarreal Anaya has begun negotiations with industries across the state to limit water usage to preserve drinking water for residents.
"Until rainfall volumes begin to increase, forecasts remain firm in predicting that extreme drought conditions in Mexico could remain through the summer," Everstream Analytics said. "This is due to a combination of inadequate rainfall, extremely high temperatures and drier-than-typical weather conditions for this time of year."
A spokesman for plastic sheet leader Plaskolite in Columbus, Ohio, said the firm's two sheet operations in Mexico haven't been affected. A spokesman for LyondellBasell in Houston declined to comment on the firm's Mexican operations.
Officials with Chemours in Wilmington, Del., said May 31 that it had paused production at its Altamira titanium dioxide manufacturing facility. Titanium dioxide is a common plastics whitener.
Sabic closed an engineering resins unit in Altamira after local water officials told the firm they could no longer pump enough water. Sabic, based in Riyadh, Saudi Arabia, with U.S. offices in Houston, makes polycarbonate, ABS and acrylic resins in Altamira.
Earlier in May, Ineos Styrolution placed force majeure supply limits on resins made at its plant in Altamira. That move affected ABS, high-heat ABS and ASA resins made at the site.
Orbia has stopped production at a major PVC resin and compound plant in Altamira. The plant has annual production capacity of more than 1 billion pounds of PVC resin and also makes flexible and rigid PVC compounds, as well as plasticizers.
Mexico is also dealing with record-high temperatures. To date in 2024, Mexico's highest temperature recorded was 124° F on May 9. That is less than 2° from the country's all-time record high of 125.6° set on July 28, 1995.