Strong demand for feedstocks - and some instances of shortages - are driving prices higher for thermoplastic polyurethanes. BFGoodrich Specialty Chemicals of Cleveland, Bayer Inc. of Pittsburgh, Dow Chemical Co. of Midland, Mich., and other TPU manufacturers announced 5-6 percent price increases effective in October, and customers now are beginning to feel the effects of those increases.
David Eckert, general manager for Goodrich's Estane TPU Division, said in an interview Oct. 31 that TPU demand had increased by 15 percent annually for the past three years, and demand is not expected to fall off.
That increase in consumption, superimposed on increased demand for the primary feedstocks used to make TPUs, has caused specific instances of shortages, driving feedstock prices higher, and making TPU producers nervous, Eckert said.
None of the feedstocks used to manufacture TPUs - diphenylmethane 4,4' diisocyanate, adipic acid, butanediol, and polytetramethylene ether glycol - are used exclusively to produce TPUs.
Primary demand for those feedstocks comes from other products, such as polyester resins.
``All of these materials currently are operating near capacity levels, and there are no new plants scheduled to come on-stream in the near future,'' BFGoodrich claimed in a news release.
``TPU has little effect on the supply/demand balance for any of these materials, accounting for a small percentage of consumption compared to other plastic consumer-targeted applications,'' the firm said.
So, the effect of increased demand on those feedstocks is to put pressure on the prices for TPUs, Eckert said - hence the October price increase announcements.
Until new feedstock capacity is created, Eckert said TPU producers expect continued increases in their costs that may be translated into higher prices for TPUs.
However, in response to that scenario, Eckert said that BFGoodrich, which claims to be the largest producer of TPUs in North America, and its competitors are looking at new products with different chemistries that will let them alter their cost structure in an attempt to keep prices level.
``Every TPU manufacturer is looking at modifying their chemistry, using different diols primarily, to help keep prices competitive,'' Eckert said.