EnFreezing temperatures in the state of Texas has led Governor Greg Abbott to request that liquefied natural gas exporters Freeport LNG and Cheniere to cut their draw from the gas grid to leave supplies for power generation and home heating, Bloomberg reports.
The Texan economy has been particularly hard hit given its reliance on natural gas for electricity, heating and industrial operations with the cold weather both boosting demand and compromising the operation of infrastructure.
Panjiva’s data shows that exports of LNG from Texas climbed 25.7% higher year over year in Q4’20 and set a record high in the month of December. Demand has been driven by Chinese purchases resulting from the phase 1 trade deal, as discussed in Panjiva’s research of Feb. 15, with China accounting for 20.6% of exports from Texas in Q4’20 from zero a year earlier.
Source: Panjiva
Other regional supply chains are also struggling including with plant closures at major automakers, Reuters reports, while petrochemical plants in the southern U.S. have also suspended operations according to S&P Global Platts. Protracted closures could also have an impact on supply chains dependent on exports from Texas, particularly downstream in the plastics industry, which represented the third largest sector of exports after energy and autos.
Leading plastic products exported in 2020 included $3.61 billion of exports of ethylene-olefin copolymers with seaborne shipments led by ExxonMobil.
That was followed by $3.55 billion of polyethylene exports including those linked to Sasol and $2.05 billion of raw PVC exported by Shin Etsu among others. Other more complex products include exports of polyamides worth $1.50 billion which were shipped by Ascend Performance Materials and Kuraray.
Source: Panjiva
