We talk at length about the weather risks in the US following multiple extreme weather events during the last 12 months, but we forget that other regions are equally susceptible. Not only are there many chemical facilities on the riverways impacted by the floods in Germany but a significant volume of chemical trade takes place by barge on the rivers for both gases and liquids. We do not have an industry impact assessment for this tragedy in Germany, Belgium, and the Netherlands, but on-site flooding, especially any flooding that impacts electrics, can result in extended shutdowns for repairs, as we have seen in the past in the US.
Source: Bloomberg, C-MACC Analysis, July 2021
Separately, the rail congestion issues in the US will simply add to ongoing supply chain problems and it is important to note that while container volumes handled on the West Coast fell in June from record highs in May (see chart above and yesterday's daily report), the wait time for containers at the docks is still high. Anecdotally, driving along a rail line in Houston yesterday there were miles of hopper cars and liquid cars parked and decoupled from locomotives on a stretch of tracks that is normally empty except for moving traffic.