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  • Plastic Pipe and You

    Posted by Dan from Madison on September 10th, 2020 (All posts by )

    Preface – I own an HVAC distributor – HVAC distribution is a subset of industrial distribution.

    I received today an interesting letter from our supplier of PVC fittings. PVC is used in everything from plumbing to venting furnaces and a lot of applications in between. Every single contractor in the USA uses a PVC type product in their daily grind. The letter talked about several price increases from PVC resin suppliers – I have seen this before, and it isn’t too terribly unusual (any excuse to raise the price, right?). But also, there was this:

    Hurricane Laura dealt a devastating blow to the Gulf Coast of Louisiana where a substantial amount of PVC resin and related plastic raw materials is produced. Hurricane Laura damaged many chemical plants, including those in the PVC supply chain, and left many without any electricity. Two of the four PVC resin manufacturers have declared force majeure. Hurricane Laura also severely damaged portions of the railway system used to transport PVC resin from the Gulf Coast to various locations across the country. Depending on the severity of the damage to these manufacturing plants, regional infrastructures and railway system, the time required for us to receive PVC resin could be negatively impacted.

    Which is all to say that many building projects will see further delays, and the price just went up. Add to this the difficulty we are seeing with finished goods such as furnaces due to covid related production issues, and raw material price increases (silver) and it all makes for a miserable time to be an industrial distributor – although a time that has provided opportunity and rewards hustle and thinking outside of the box. I have never worked harder at keeping the barns full, but my contractors are very thankful and understand the challenges.

    Energizer batteries is even having covid related production issues. I have never been out of batteries before, but I guess we have never seen a year like 2020.

     

    6 Responses to “Plastic Pipe and You”

    1. Ginny Says:

      This was a wonderful peephole into the effects of Laura – and the constant creative flexibility of a good businessman.

    2. Anonymous Says:

      Dan, I worked for a Fortune 500 company in the petrochemical industry for about 20 years, 5 of them in Lake Charles, Louisiana, the epicenter of the area damaged by Laura. Our company generated over half its revenue from PVC resins. I have several friends in Lake Charles who have told me that they are being told it will be 4 more weeks before electrical power is completely restored, not the 2 weeks being reported. I have no idea how accurate this is, but that’s what they believe to be the case. There were over 500 towers either downed or severely damaged and all 9 of the major transmission lines knocked out. “Catastrophic” is a true description in this case.

    3. Mike Doughty Says:

      That was me above.

    4. Mike Doughty Says:

      I was able to find this, dated today. I can tell you for certain that there are no chemical plants in the area described.

      HOUSTON (ICIS)–Workers restarted the first of nine high-voltage transmission lines that provide power to a part of Lake Charles, Louisiana, US, which has several chemical plants that remain shut down because of power outages caused by Hurricane Laura.

      This allowed the region’s main power distributor, Entergy, to restart one of its power plants in Calcasieu parish, which includes Lake Charles. Initially, the plant will provide power to customers in the area south of Interstate 210 and west of Lake Street, the commercial district and surrounding areas on Nelson road to Country Club road and a portion of the Prien area, Entergy said.

      It is unclear if any chemical plants are in those areas.

      Chemical companies had started to shut down plants in the days before Hurricane Laura made landfall on 27 August in Louisiana, near the border with Texas. Laura’s eye wall, the most damaging part of a hurricane, passed directly over Lake Charles, Entergy said. Transmission and distribution systems will require nearly a complete rebuild.

      Chemical plants in Lake Charles remain down because they do not have power.

      Entergy warned that it could be late September before power is available to most customers in southwestern Louisiana. It could take even longer for some customers because of the complexity of the restoration work.

      Entergy’s timeline matches those given by LyondellBasell and Westlake.

      LyondellBasell has a polypropylene (PP) plant that is shut down in Lake Charles. Westlake has a chemical complex.

      Other companies with shutdown plants in Lake Charles include Sasol, Indorama and LACC, a joint venture made up of Lotte and Westlake.

      Supplies for several petrochemicals and plastics were tight before the hurricane, and the shutdowns are further squeezing these products.

      Companies have since declared force majeure on polypropylene (PP), polyethylene (PP) polyvinyl chloride (PVC) and polyethylene terephthalate (PET).

    5. Dan from Madison Says:

      2020 is a lot of work.

    6. Bill Brandt Says:

      I learned something else about PVC and HVAC systems. After seeing water drip from my ceiling for about the 3rd time in 20 years – in the Bone-dry central valley summer – I learned that over time mold will grow inside the pipe and the condensation then drips into a pan, to eventually overflow onto your ceiling.

      White vinegar is the antidote.