ASC Provides Update on Supply Chain Disruptions for Basic Adhesive Intermediates

Supply chain disruptions caused by extreme cold and freezing along the US Gulf Coast in mid-February are easing slightly, but significant delivery delays continue. Demand remains far outpacing supply.

ASC (Adhesive and Sealant Council) President Bill Allmond spoke last week with half a dozen ASC manufacturer members of various sizes about these ongoing challenges. Key points emerging from the meeting were as follows. All manufacturers reported slow progress in the availability and supply of chemical intermediates for adhesive production. There is considerable variability; significant delays continue in acrylates and vinyl acetate (monomers and polymers). Propylene oxide and acrylate monomer production are restarting, while others such as acrylate polymers remain under allocation or force majeure. Other raw materials experiencing supply shortages include ethylene vinyl acetate, methylene diphenyl isocyanate and methylene diphenyl diisocyanate, though some manufacturers report polyurethane production has improved substantially. During this unprecedented crisis, manufacturers have largely managed to supply their customers. Some took alternative steps such as importing raw materials from Asia and other parts of the world to maintain supplies. Others minimized the impact of the disruption by sourcing materials domestically (within the US) in regions outside the Gulf Coast as part of their sourcing strategy. Overall, communication regarding supplier recovery is reported to be good, particularly for materials critical to manufacturers' product lines. However, some variability exists depending on the supplier. Some manufacturers said they expected better timing of information from suppliers, while in some cases they acknowledged that suppliers could not receive timely information from their own suppliers, which could create a domino effect. A significant bottleneck currently facing every manufacturer is logistics. Depending on the material, packaging and delivery times are being pushed further out due to heavy demand and insufficient available carriers, truck drivers, containers, vessels and even pallets. Most manufacturers agree that full recovery of supply chains will take at least through the third quarter of this year, possibly longer.