Register now for our retail webinar: Improve your audience targeting with best practices. Learn data-driven strateg… https://t.co/uL60Sw4kJO
Key suppliers monitor inventories of propylene derivatives as raw material production resumes
Image Source: Getty Images/Akhmad Bayuri
[Excerpt of an AutoTechInsight by IHS Markit article]
The winter storm that hit the United States Gulf Coast (USGC) region in the third week of February 2021 resulted in one of the worst electric grid outages in the United States, leaving millions of people without electricity and water for four days in the state of Texas. The blackout, along with freezing cold temperature, also forced almost the entire refining and petrochemical industry in Texas and Louisiana to shut down operations. While the storm is over and the recovery process is under way, it is inconsistent across the industry, which, if prolonged, could threaten the supply chain for many end-markets, including automotive.
The cold wave affected almost every propylene production facility in Texas and Louisiana. The two southern states account for about 75% of the all propylene capacity in the US. Propylene is the second-largest volume chemical produced globally after sulfuring acid. It is a precursor chemical whose derivatives are critical raw materials for many industries, including the automotive industry.
Polypropylene is used as a raw material in producing instrument panel, bumper facias, fender liners, lighting, electrical housing, door trims, and seating components.
Propylene glycols are primarily used in the resin component of fiber reinforced plastics (FRPs). In automotive, FRPs are used in high-strength, light weight, structural applications. Propylene glycols are also used in coolants, antifreeze, hydraulic fluids, and lubricants in multiple industries.
Proplyene Oxide, a derivative of Propylene, is a major chemical component of flexible and rigid polyurethane foams. Flexible polyurethane foams are used for cushioning in seats, headrests, and armrests, as well as in furniture and bedding applications. Rigid polyurethane and polyisocyanurate (PU/PIR) foam is utilized mainly as an insulation material in construction.
Earlier this month, there were reports in the media that the US automotive industry could face shortage in supply of seat foams. However, no automaker or supplier has raised concern yet. Major seating suppliers in the US, including Adient, Lear, Faurecia, and Magna, also produces seat foam and currently may have enough stock to manage production for the next few weeks.
According to Colin Giles, senior technical research analyst at IHS Market, "While a shutdown caused by the propylene shortage is unlikely at this time, suppliers and OEMs alike should be watching the situation around this supply chain carefully, and keeping a close eye on their own inventories of propylene derivatives. Any setbacks in the restarting of these facilities could lead to shutdowns if end-use suppliers, such as seat foam manufacturers run out of their feedstocks. Regardless of how the restart and recovery processes progress, suppliers of components that use propylene derivatives should expect tight inventories and higher material costs for much of 2021."
- Major revision for global light vehicle forecast, production impacted well into 2022
- Medium Heavy Commercial Vehicles: The other face of the pandemic in Brazil
- Fuel for Thought: A Rocky Recovery in the Second Year of the Pandemic
- Substantial Internal Cannibalization for Incremental Models
- IAA Mobility 2021: Germany’s new auto show to focus on electric autonomous vehicles and mobility
- Hybrid: Bridge to Electrification – August 2021
- How will 5G impact the driving experience for the consumer?
- Brand Loyalty Among US Auto Consumers Drops to Six-Year Low
The IHS Markit light vehicle production forecast has been cut by 6.2% or 5.02M units in 2021, and by 9.3% or 8.45M… https://t.co/JK2K96SGi2