The year 2020 marked a turning point in the global economy with the onset of the COVID-19 pandemic that set off a chain of events that have formed and informed the present crisis that we find ourselves in. One such major event is the acute shortage of industrial raw material supplies that are essential to the manufacture and distribution of a multitude of products that find precedence in almost every aspect of our lives. Such a problem does lend itself to a cause for global concern as it disrupts production and the normal way of living in the fast-paced world of today.
Current consensus predicts that this shortage is likely to last for a substantial part of 2022, potentially bleeding into 2023 as well. This has been further compounded by the influx of demand and inflation in prices which is likely to present us with a drastically altered economic scenario in the post-pandemic world. However, this paucity of supplies is not the result of a single cause alone. The catastrophic effects of the ongoing COVID-19 pandemic accompanied by inflation and the adverse climatic conditions that hit North America this year have been largely instrumental in the creation of such a bottleneck.
How COVID - 19 led to inflation and chemical scarcity
Without a doubt, the ongoing COVID-19 pandemic has played a key role in disrupting the operations of chemical supply companies across the globe. Most notably, the pandemic created a huge, unprecedented demand for chips that are used in automobiles and electronic gadgets like laptops and cell phones, while also simultaneously slowing down production due to subsequent cautionary laws. As a result, production will not be able to meet demand until at least late 2022.
Besides chip scarcity, the pandemic has also impacted the operations at several important local, national, and international commercial ports. The port of Yantian in Shenzhen, China, which is a primary source of export to the US, was no exception. Furthermore, understaffing and recurrent pandemic-related port shutdowns have also contributed to the delay in moving shipments across the world, and the increase in import costs. Additionally, trade tensions between America and China have also escalated the existing shaky state of affairs.
The unfavorable climatic conditions posed by Hurricane Ida and the Texas Freeze
The effects of the ongoing pandemic were further exacerbated by the inclement climatic conditions that prevailed over the United States in 2021. Hurricane Ida and the Texas Freeze which occurred earlier this year aggravated the already precarious situation of the petrochemical industry which has witnessed a rise in demand for polyethylene, polypropylene, resins, and other essential chemicals.
Coupled with inflation and product paucity, these natural disasters forced the closure of several chemical plants and have left them without power or energy for an extended period of time which hindered production, and in essence, delayed supply.
How has the healthcare sector been impacted?
Of the many chemical distribution companies impacted, medical manufacturers have been one of the most notably affected. The dearth of medical masks, PPE kits, and drugs including opiates, paralytics, and sedatives, as well as active pharmaceutical ingredients (APIs), have not only impacted treatment but also the production and distribution of the Pfizer-BioNTech and Moderna vaccines. Such shortages cannot simply be solved by importing the required raw materials due to the high risks of potential contamination. The scarcity of resin has particularly affected the healthcare manufacturing industry where it is used in tubing and other purposes, which has been a major concern while in the midst of a worldwide health crisis.
As established earlier, this shortage of chemical ingredients and other raw materials is not likely to abate until late next year. A possible way of combating this issue would be by setting practical and achievable goals of supply and delivery.