Afternoon Coffee: Hurricane Laura set to make landfall Wednesday evening; Aluminum can demand surges; Orders for big-ticket manufactured goods rise

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Hurricane Laura is expected to make landfall on the U.S. Gulf Coast on Wednesday evening as a Category 3 or 4 hurricane, according to Supply Chain Dive. The storm — along with earlier Tropical Storm Marco — have already altered supply chains in Louisiana and Texas, with the potential to greatly impact the Houston area.

The Port of Houston tentatively planned to cease operations at terminals Tuesday evening and entirely close the port Wednesday and maybe Thursday. Road closures and downed trees have brought concerns along I-10, an east-west highway running from Florida, Louisiana, Texas and into California, and I-45 which connects Dallas to the Gulf Coast. About 200 miles of both interstates are in the storm’s potential path, according to the article.

Tropical storms Marco and Laura caused issues for supply chains around New Orleans. Forecasters said Hurricane Laura could cause flooding. Jonathan Porter, an AccuWeather meteorologist, said areas east of the Port of Houston and west of the Port of New Orleans are likely to see significant impact.

"There is still a risk of hurricane-force wind gusts in the Houston/Galveston area if Laura moves further west as the hurricane approaches the coast — should this occur, there will be greater impacts to port operations and oil refineries given the high density of key assets in the Houston area," Porter said.

The race to make more aluminum cans

Demand for aluminum cans is so high right now that manufacturers can’t keep up, according to the Wall Street Journal. Can makers have boosted their manufacturing capacity to prevent shortages.

The demand is in part because of the COVID-19 pandemic, which forced bars and restaurants to close throughout the U.S.

Consumers rushed to buy large packs of drinks and canned foods. The pandemic has accelerated a shift of consumers favoring aluminum drinking cans, which manufacturers say are lighter and have higher recycling rates than glass or plastic.

Miller Lite and Coca-Cola are just a few companies who said it might be harder to buy some of their products in aluminum cans in near future, according to the article. U.S. retail sales of aluminum canned drinks boomed nearly 24% by volume in March.

“From now until the end of the year, and in almost every market where we produce, cans will be in short supply,” Crown Holdings CEO Timothy Donahue told investors last month, the article reported. “We do not have the ability to make up months of demand in a shorter time period.”

Aluminum buyers can check out aluminum prices on our sister website, MetalMiner.

Orders for large manufactured goods jump in July

The Commerce Department reported Wednesday that orders for big-ticket manufactured goods jumped 11.2% in July, according to the Associated Press.

The strong gains were led by the transportation sector, normally a volatile measure. Excluding transportation, orders would have risen at a much more moderate pace, around 2.4%. Economists caution that orders for durable goods could lower if coronavirus infections surge in the fall, which could force more factory shutdowns again, according to the article.

“The details of the report indicate that businesses remain wary as the initial post-lockdown burst in activity is winding down and the public health situation isn’t under control,” economist Lydia Boussour told the Associated Press.

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