What’s Causing the Spray Foam Material Shortage?

 

Multiple events have had an impact on the availability of Polyurethane foam material. Many in the news are referring to it as “the perfect storm”. The shortage is affecting a wide range of industries, such as automotive, furniture, refrigeration, insulation, and coating industries. The following events have contributed to the spray foam material shortage:

 

  1. The ice storm that hit the Gulf Coast has affected the Propylene Oxide plants in Texas and Louisiana. Propylene Oxide is an intermediate in the production of polyether polyols for polyurethane foams. Polypropylene Oxide requires the cooperation of multiple industries resulting in a worldwide shortage. Hopefully, the Texas and Louisiana plants can get back to production once they solve their (frozen pipes) plumbing issues and the area’s electrical problems. Once that is accomplished, the demand for polypropylene oxide will be astronomical in comparison to past demands. This massive winter storm also affected the Texas oil refineries, which resulted in fewer byproducts. The automotive industry depends for polyurethane material, made from these by-products, for making car seats and other components. Auto makers are scrambling to find an alternative.

 

  1. The Coronavirus, of course, impacted most industries by shutting them down or slowing them down. Now that vaccines are available, we should start to see this problem abate.

 

  1. Isocyanate, which is shipped to the U.S. from China, has its issues too. The U.S. government currently has Tariffs on China. Meanwhile, China sells its products to European and other counties.

 

  1. Tanker ships carrying Isocyanate are stranded off the west coast, unable to dock because of bomb threats. The details surrounding this event are unclear due to national security. Alternate routes are being explored, but it will be more costly. Moreover, the Suez Canal (another avenue for distributing products)  is currently blocked since a huge ship has run aground. It is unknown how long it will take to move the ship so that other ships can pass through.

 

  1. The shortage of shipping containers is cited as another problem. This is driving up the cost of shipping.

 

  1. Price-Fixing Conspiracy: Some of the major chemical manufacturers have had class action lawsuits filed against them for limiting production of the chemicals used in the manufacture of polyurethane foam and artificially inflating the prices even though the cost of raw materials was unchanged. The lawsuit claims that defendant companies conspired via trade groups thus taking advantage of the struggle that competitors would have to deal with when entering the market for the chemicals—specifically toluene diisocyanate (TDI) and isocyanates. This would allow the named chemical companies to control the majority of the supply because these chemicals have no substitute or replacement.

 

Most SPF contractors have projects lined up but are unable to deliver their services. This has the potential for devastating medium-sized and smaller businesses. A few contractors we spoke with plan to use other insulation products, sealing them in place with a smaller amount of foam. This is assuming they can negotiate that kind of  change. The problem is that no other product provides the same insulation effectiveness and value as spray foam. Some companies saw the shortage coming and saved a few stockpiles, but they are in danger of running out before material becomes available again. Other contractors and industries were caught totally off-guard. The shortage has resulted in raising prices, in some cases just because they can.  All in all, be prepared to pay higher prices until Polyurethane foam materials become more readily available.

With the nation’s push for green energy and increasing drive toward energy efficiency  and conservation, something must give in order to get the desperately needed chemicals for the production of SPF material so that industries can get back into the full swing of their businesses.

This is a critical time, and it will take a united effort to get these problems solved. As much as possible, folks in the SPF industry need to contact their local and state representatives. Make your voice heard today!

 

 

 

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