|The year 2011 will be remembered as the year with the highest catastrophe-related economic losses in history. Natural and man-made catastrophes cost the world economy a whooping US$350 bln. Preliminary estimates peg total insured losses for the global insurance industry from disasters at US$108 bln in 2011.
A magnitude 7 earthquake that struck a rural area of northern Argentina ushered in the New Year 2011.Other disasters in the first quarter of 2011 included flooding in Brisbane and Rio de Janerio, powerful cyclone in Queensland, and a 6.3 magnitude earthquake in Christchurch. This list was topped by an earthquake of magnitude 8.9 in the East Coast of Honshu, Japan, accompanied by a 23 foot (7 meter) tsunami that washed far inland and led to a huge blast at nuclear power plant and a meltdown alert at the nuclear reactor that finally led the disaster to be declared on Chernobyl level. Q2-2011 started with one of the largest single-system tornado outbreaks in US history resulting in 178 confirmed tornadoes across 16 states, volcano eruptions in Iceland, Chile and Indonesia along with deadly floods that affected South China. Q3 saw Hurricane Irene lashing the US coast followed by huge storms across New York, floods in Pakistan that killed over 200, a powerful typhoon hitting Philippines. The final quarter saw a 7.2 magnitude earthquake in Turkey, severe floods in Thailand that threatened its capital city Bangkok. A victory against terrorism for the world, and for USA in particular, was the killing of Osama Bin Laden in a ground operation based on US intelligence in August 2011.
Impact of disasters on the petrochemical upstream and downstream industry
Revolts in the Middle East and North Africa in Q1-2011 led to severe upheavals in the global scenario. The turmoils in the Middle East led to volatility in oil prices, while the earthquake in Japan impacted the global petrochemicals, automotive and allied industries. The earthquake which rocked Japan on March 11 mostly impacted the northern portions of Honshu Island, resulting in a 20% reduction in refining capacity in Japan which makes up 3.5% of Asia�s and 1% of the global refining capacity. Following polymer plants were shut for days: Japan PE's 260,000 tpa LLDPE and 60,000 tpa LDPE plants in Kashima, Japan PP's 640,000 tpa PP plant at Kashima, Sun Allomer's 127,000 tpa PP plant at Kawasaki, Kaneka's 178,000 tpa PVC plant at Kashima, Shin-Etsu's 550,000 tpa PVC plant at Kashima, Taiyo Vinyl's 90,000 tpa plant at Chiba. Of the country's 15 crackers, 9 were near the areas affected by the earthquake including crackers of Maruzen, Mitsubishi Chemical, JX Nippon. Maruzen shut two naphtha crackers at its Chiba plant with capacities of 480,000 tpa and 690,000 tpa of ethylene. Kyokuto Petroleum shut its 175,000 bpd Chiba refinery. Tonengeneral shut the main units at its 335,000 bpd Kawasaki refinery near Tokyo. Crude oil demand was dented as refineries remained offline, because Japan is the third-largest crude importer in the world and is the largest importer of naphtha. Automotive production, electronics and white good along with other industrial production also experienced shutdowns. Companies that had to shutdown included Sony Corp, Nissan Motor Co, Toyota Motor Co, Honda Motor Co, Fuji Heavy Industries Ltd, and many more. Besides production, exports of Japanese vehicles and auto parts were heavily impacted. Sony suspended operations at 6 production facilities, Nissan halted production at all 4 of its car assembly factories, Toyota halted production at two factories with combined annual capacity of 420,000 small cars built mainly for overseas markets. Fuji Heavy Industries Ltd. halted 8 of its 10 factories, including all 5 car and car parts-related plants for its Subaru-brand vehicles.Thailand faced its worst floods in 50 years that flooded two thirds of the country and affected much of it�s north, northeast and central regions and ended with flooding of its capital Bangkok, inundating 77 provinces. Thai government to cut its economic growth forecast for 2011 to 3.7% from 4%. The main industrial centers north of Bangkok were flooded, requiring major automotive and electronic plants to shut down. Being located in non flooded areas, Thai petrochemical operations were unaffected but polymer demand from many user industry markets was hampered from manufacturers in several end product applications including agricultural, automotive and electronics sectors, where the impacts of the damages are seen the most.
From North Africa and the Middle East to the Persian Gulf, popular uprisings led by the unemployed youth rattled long running dictatorships. The first domino to tumble was Tunisia, followed by Egypt. Ruled by Hosni Mubarak for nearly 30 years, the Egyptians anti-government protesters held Tahrir Square for 18 days despite attacks by pro-Mubarak partisans. Unrest spread in Algeria amid anger about the high cost of basic food and lack of decent housing. Libyans, run by the iron fist of Muammar Gadaffi since 1969, rebelled despite tightly controlled media, eventually leading to the massacre of Gadaffi and his son Mo'tassim. The dissent spread to Jordan ruled by King Abdullah II, springing from the high cost of living. People of the tiny kingdom of Bahrain run as an absolute monarchy by the Al Khalifa royal family also revolted. The Middle East and North Africa produce more than one-third of the world�s oil. Libya supplies 2% of the world�s oil, and the revolution led to disruption in oil supply. Libya�s oil output has halved, as foreign workers fled. Brent crude jumped 15% as Libya�s violence flared, reaching US$120 a barrel towards end of February, only to be pushed down on the promise of more production from Saudi Arabia.