When a catastrophic winter storm hit Texas in mid-February with snow, ice, and sub-zero temperatures, much of the Lone Star state ground to a standstill. With the state’s infrastructure unprepared for the unprecedented cold, rolling blackouts left many without power, forcing thousands of businesses to hunker down. And among those closures, petrochemical plants that make chemicals found in everything from fabric and foam to plastics had to halt production.
And now, nearly six months later, the impact of those closures is still being felt in the home furnishings industry as material shortages already brewing due to the pandemic were exacerbated by the storm. Disruption in the production of chemicals used in items like foam and acrylic fabrics have left many in the home sector without the materials they need to fill overwhelming orders.
Flexible polyurethane foam used in furniture cushions and mattresses is primarily made with toluene diisocyanate (TDI). And TDI is made with precursor chemicals like propylene oxide. During the storm, not only did TDI plants go offline, but the three companies that produce propylene oxide in North America—LyondellBassell, Dow, and Indorama—were forced to close their Texas facilities.
“On top of existing tightness in chemical supply, the winter storm hit was catastrophic,” said Russ Batson, executive director for the Polyurethane Foam Association. “The U.S. production of toluene diisocyanate is limited to two companies and two states [Texas and Louisiana], and the storm was particularly damaging in Texas.”
And the recovery from those closures was more complicated than simply restoring power. During the storm, lines in several plants froze, and supplies of steam, nitrogen, and hydrogen were lost. So maintenance closures slowed the return to production for many facilities.
At the same time, imports of foam and the chemicals to produce the material have slowed because of Covid closures in countries like China. One bright spot, said Batson, is the recent reopening of a European facility.
“The market in these chemicals is global,” he said. “Some foam producers tend to source domestically, but in the current situation, people are looking at imports. Having more capacity from the BASF restart in Germany should help.”
Foam isn’t the only home furnishings material in short supply due to the Texas storm. Textiles, particularly acrylic fabrics often used in outdoor settings or as indoor performance upholstery, have been impacted due to chemical shortages, as well.
Textile mills already experiencing issues due to Covid-induced global supply chain disruptions found themselves dealing with yet another shortage that remains months after the Texas storm.
“The epic storms in Texas earlier this year further impacted supply chain disruptions,” said David Swers, chief operating officer of Glen Raven Custom Fabrics. “The global supply of some raw materials used to create our Sunbrella fabrics was impacted by the shutdown of petrochemical plants in Texas during the storm. While we could have not predicted this shortage, it quickly became another challenge we needed to address.”
Acrylonitrite, a chemical used in the production of acrylic fabrics, has been in shorter supply since the storm. Chemical manufacturers INEOS and Ascend shut down and declared force majeure at their Texas plants following the storm, and production was impacted well into April.
And while most of the plants are back up to regular output, the huge increase in demand has made it difficult for chemical producers to make up for time lost during the Texas storm.
In the meantime, fabric producers like Glen Raven continue to scramble to meet demand and make up for shortages.
“To continue addressing the unprecedented increase in demand for Sunbrella fabrics and despite the supply chain constraints that remain outside of our control, our associates are working very hard through extra shifts and increased efforts to supply as much fabric as possible,” Swers said.
Batson said he has seen modest improvement in production of foam and its precursor chemicals over the past few weeks. But he cautions that this situation won’t sort itself out until demand—not only from the furniture and mattress industries but also automotive, carpet and packaging—subsides a bit. In the meantime, he’s heard several companies express interest in building new foam plants. While those facilities wouldn’t be available anytime soon, increasing the number of producers could help prevent a situation such as this from happening in the future.
“That’s how these situations correct themselves,” he said. “Companies look for alternatives—is there a substitute for propylene oxide? Are there are chemicals that can be swapped in? Is there a way more facilities can come online?”
While preventing future shortages is certainly important, most furniture manufacturers are more concerned about filling the backlog of orders today.
“It remains an issue,” said Andy Counts, CEO of the American Home Furnishings Association. “Although the chemical supply chain is back to near its original capacity, the huge demand outpaces this supply. Companies need more than 100 percent of historical allotments to meet existing and new orders.”
And that lag means consumers will have to continue to wait for that new sofa or mattress.
“Some companies are in better shape than others due to various strategies and relationships,” Counts said. “However, much of the industry will continue to experience extended lead times as long as furniture demand remains high.”