Jakarta, CNBC Indonesia – The winter that hit a number of states in United States (US) causing the cessation of several manufacturing activities in Uncle Sam’s country. As a result, global supply chains such as plastics, petrochemicals, and semiconductor products have been disrupted.
“Due to cold weather, factories have to close their production activities and consumers feel the crisis,” wrote AFP, quoted on Sunday (21/3/2021).
A Japanese automotive company, Toyota, for example, has been disrupted by petrochemical supplies, which has disrupted production at its Kentucky, West Virginia and Mexico factories. Not only that, Honda also experienced supply chain disruptions due to the impact of the Covid-19 pandemic which caused them to temporarily close five of its factories in Canada and the US.
“Regarding the impact of Covid-19, congestion has occurred at various ports, shortages of semiconductors, and severe winter weather,” said Honda.
Meanwhile, global apparel manufacturer Nike said sales of its shoes and sportswear were also affected by congestion at ports across the country.
Meanwhile, at the Best Buy home appliance store in suburban Washington, a customer said he spent an hour with a sales assistant, only to find that many stove models would not be available for several weeks.
“I have to buy a black stainless steel stove when I want a white one, and it costs $ 200 bucks more than I budgeted for,” complains Virginie Hines, a French woman living in Maryland.
Not only that, the supply chain for plastics was also disrupted. In mid-February, freezing temperatures paralyze Texas and Louisiana. Both are manufacturers who convert oil into polyethylene which is used to make plastic bags, shampoo bottles or toothpaste tubes, polypropylene, which is used for hard plastics in dashboards or car air conditioners or PVC.
At the height of cold weather, more than 70% of ethylene production capacity also saw a decrease of at least 62% of polypropylene production, according to S&P Global Platts.
The disruption in plastics production comes after a semiconductor shortage linked to a surge in demand for electronics since the start of the pandemic, which has plagued the auto industry since the start of the year.
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