LyondellBasell's Propylene Oxide Supply Issues at Bayport Plant Heighten Concerns for Polyurethane Foam Buyers

In mid-March 2026, a fire occurred at LyondellBasell's Bayport Choate plant in Pasadena, Texas. The facility produces propylene oxide (PO), a key raw material for polyurethane foam. Polyurethane foam is widely used to fill seat cushions, modular sofas, and standard sofas, and also serves as the protective packaging material when these products are shipped.

The plant is one of the world's largest propylene oxide production facilities. LyondellBasell announced that it would close certain production lines for repairs, which would significantly reduce the plant's output. The raw material supply that furniture manufacturers rely on to complete their orders suddenly became precarious, and they were naturally affected.

"Most of our cushion suppliers buy their foam from just a handful of foam producers," explained Corey Teague, President of Huntington House, a furniture brand based in North Carolina, USA. "So when those few foam producers face a chemical shortage, they raise their prices, and that increase passes down the entire chain."

After the fire, suppliers quickly notified partners that polyurethane foam prices would increase across the board by 10% to 20%. The good news for manufacturers and their customers is that foam typically accounts for only a small portion of product costs. "Foam probably makes up 5% to 8% of the total cost of a piece of furniture," said Trent Wright, head of manufacturing operations at Coley Home. "So even a 20% increase in foam prices might only affect final margins by one or two percentage points. Even a significant price increase won't have a huge impact on your overall costs."

However, the fire comes as manufacturers face numerous other pressures on their profit margins—with the surge in oil prices caused by the US-Iran conflict making matters worse. Foam shortages and rising costs have further cemented their previously planned price increases. "The price increase for foam has made our upcoming price increase unavoidable, because it's really beyond our ability to absorb," said Tim Newlin, President and CEO of Norwalk Furniture, based in Ohio, USA. The company recently announced a 3% price increase effective June 2026. But he said the main driver is crude oil prices, not foam. "Everything from your vendors is going up because of rising import freight costs."

Meanwhile, pressure on European supply chains from the US-Iran conflict, as well as shortages and price increases for another important chemical, toluene diisocyanate (TDI), have exacerbated market tensions. "At this point, we remain hopeful that we and other foam buyers who are in solid financial shape won't face supply shortages, but much depends on how quickly the damaged plant can resume production," said Alex Shuford, CEO of Rock House Farm, based in North Carolina, USA, the parent company of Century Furniture, Hancock & Moore, Hickory Chair, and Highland House.

For some manufacturers, the issue is not foam price increases but the inability to obtain foam at all. Larger companies can leverage their large order volumes to pressure suppliers to ship as usual. Smaller manufacturers, however, are constantly worried about foam allocations—where, due to shortages, suppliers only deliver a certain percentage of their orders. "Some vendors are allocating customers," said Trent Wright. "If they receive only half the foam they used to, then our vendors have to decide, 'Who gets it?' It becomes, 'Are you the most important customer?' Fortunately, we have very good personal and business relationships with our suppliers, so while foam prices have gone up, we're not too worried about allocations. But I think allocations will eventually hit the whole industry, and that will certainly extend lead times and hurt margins, because you can't ship as you normally would."

To guard against possible future allocation limits, many suppliers rushed to buy large quantities of foam immediately after the fire at this raw material supplier's plant, ensuring they would have enough inventory in the near term to fill orders. "We work with several large cushion manufacturers, and they immediately started buying as many foam buns as they could," said Nathan Copeland, President of Highland House. "The reasons were twofold: lower prices and to protect us from being allocated."

This foresight came from past experience. In February 2021, an ice storm swept through Texas, damaging multiple chemical plants. Plant shutdowns combined with power outages led to shortages across the polyurethane foam industry—at a time when pandemic-driven orders were making furniture brands exceptionally busy. "We were put on foam allocation back then," recalled Nathan Copeland. "At that time, business was surging, and we needed 120% of our normal allocation because we needed enough foam to fill all our orders. That allocation really affected everyone at our company. They had hoped it would last eight to ten weeks, but it ended up lasting nearly twenty weeks."

Despite the many challenges, the current situation is far better than the 2021 crisis. "We initially expected the market to normalize during the Spring 2026 High Point Market, then we adjusted that to August," said Corey Teague, President of Huntington House. "But what we've heard recently is that now it looks more like June or July, so things are getting better. We are optimistic that the problem will be resolved faster than we initially thought."