With severely depressed inventory levels, Dow Plastics on May 1 instituted a sales control program for polycarbonate resins that the company expects to remain in effect until fall. Dow of Midland, Mich., GE Plastics of Pittsfield, Mass., and Bayer Inc. of Pittsburgh - the leading PC producers in North America - all have had difficulty meeting demand.
Bayer, which was known as Miles Inc. until April 1, declared force majeure for PC Feb. 1, and now is supplying its customers on an allocation program that provides about 75 percent of their demand. Meanwhile, GE Plastics has told its customers that it has a 20-week lead time for PC orders.
``Capacity is tight,'' said Charlie Crew, vice president and general manager of commercial operations at GE. ``I think it will remain tight throughout this year and well into next year.''
Crew said GE had invested in PC capacity in 1993 and 1994 and has additional capacity coming on line later this year and more next year.
``We are continuing to look at further investments in capacity,'' Crew said in a telephone interview from his Pittsfield office. ``The applications are going to continue to grow.''
Dow Plastics' Rick Bond, group leader for engineering thermoplastics and new business development, said he instituted Dow's ``demand management program'' to provide asmuch resin as possible while rebuilding severely low inventories.
Dow is turning away new business opportunities, telling potential customers that it does not expect to have resin available for new projects until the third quarter of this year, Bond said in a telephone interview May 16.
Some new capacity is being put into production at Bayer and GE Plastics, and Dow is gaining new capacity through its joint venture in Tokyo, Sumitomo-Dow Ltd. Sumitomo-Dow is adding 88 million pounds and is to begin production by July, Bond said.
``You have to look at global capacities and demand for polycarbonate,'' Bond said, noting that the new Sumitomo-Dow production will add about 5 percent to worldwide PC capacity.
No other capacity increases have been announced through 1997, while PC demand is expected to increase 7-10 percent each year for the next several years.
``Any new capacity will continue to be absorbed immediately. It looks as if we will continue to have a tight supply situation for the next few years,'' he said.
The price for bisphenol-A, a critical PC feedstock, increased in April. Producers last increased PC prices Jan. 1.