The North American resin market has traveled back in time to 2003. And it's anyone's guess as to when it returns to the here and now.
Sales of most major commodity plastics in 2008 slipped to levels not seen since 2003, and numbers for 2009 may be lower still. If that happens, it will be the only time in the decade of the 2000s that the industry had back-to-back down years.
But that's what a global economic collapse will do. Resin makers and buyers of all sizes are searching to find “the new normal” — a level that's better than 2008-09, even if it's well-short of the heady peaks of 2004-07. That's the level where they will feel more confident about their businesses again, and that's when they'll start buying new machinery and processing more resin.
In resin pricing — everyone's favorite topic — prices have recovered throughout 2009, but mostly remain below where they were before the pricing crash of the fourth quarter of 2008. The exception here is the eccentric PP market, where a 54 percent tumble in the last four months of 2008 was followed by a 68 percent leap in the first nine months of 2009, due mainly to shortages of propylene monomer feedstock. PP buyers do not fear vertigo.
Plastics News recently took some time to talk with several veterans of the resin market to find out what might be in store for 2010. For most of them, hope is a flickering light in the coming year, but it's still there.
Polyethylene
Let's start with Westlake Chemical Corp.'s Jeff Taylor, playing the role of optimist.
“As each month has progressed [in 2009], the business has gotten better,” said Taylor, PE vice president with Houston-based Westlake. “As you compare year over year through August, it may have looked bad, but September and the rest of the year should be better.”
Taylor's prediction is likely to come true, partly because the fourth quarter of 2008 was close to apocalyptic for the PE market. Through August, 2009 was far from pretty, with total sales of linear low density PE down almost 4 percent, high density PE down about 6 percent and LDPE off 12 percent, according to the American Chemistry Council in Arlington, Va.
Dow Chemical Co.'s Glenn Wright agreed that North American PE is looking “more positive on the demand front” in the second half of 2009.
“We've seen improvement every month and the [gross domestic product] trend is positive,” said Wright, commercial vice president of Dow's North American basic plastics unit.
“The sales drop could be cut in half by the end of the year, and growth next year could be in the low single-digits. We never saw a falloff in some food packaging markets and flexible markets. Industrial products could exceed GDP growth next year. Once a positive GDP report comes out, that could have a positive psychological effect,” he said.
Export sales helped HDPE (up 11 percent) and LLDPE (up 4 percent), but hurt LDPE (down nearly 19 percent) in the first eight months of 2009.
“North American demand should improve [in 2010], but the big challenge for [PE] suppliers is that the export market is going to get smaller because of new capacity in the Middle East,” said Mike Burns, a PE market analyst with Resin Technology Inc. in Fort Worth, Texas. “I don't think [domestic] demand is going to pick up to cover that much of the market.”
“The big question on operating rates is what will happen to exports,” added Taylor. “The Middle East can't supply the whole world. At most, they'll be able to supply 20 percent. If our costs stay where they are today, we can resist import material coming into North America.”
“The export market has been very robust,” Wright said. “That's taken off excess capacity and kept supply short to tight. Producer inventories are usually at 42 days, but now they're in the mid-30s and operating rates are in the mid-90s.”
Food packaging also appears to remain an oasis in the PE desert. Taylor said he attended an industry event earlier this year where he ran into three of his customers in the space of an hour.
“They all said 'Thank God I'm in food packaging,' “ Taylor recalled. “Pouches and flexible packaging are doing well. Every time I'm in a grocery store, I see another product converted to that type of packaging.”
Capacity has been removed at several locations, but the PE market remains oversupplied, according to market watchers. In this light, LyondellBasell Industries AF SCA's recent decision to maintain a 500 million-pound-capacity plant it had planned to close in Alvin, Texas, was a bit surprising.
“There's still too much capacity,” said PE/PVC analyst Nick Vafiadis of Chemical Market Associates Inc. in Houston. “And the [global PE] industry will be at record levels of overcapacity when new capacity in the Mideast and China comes on.”
Vafiadis spoke at a recent plastics processors conference hosted by his firm in Chicago.
CMAI puts North American operating rates at under 85 percent and expects them to remain at that through 2013. Demand will rebound somewhat, with demand growth from the rotational molding market averaging 4 percent per year through 2014, CMAI said.
Vafiadis added that in 2009, U.S. PE makers “showed a discipline like we'd never seen” by sticking to price increases and controlling inventory. On the pricing front, average North American prices are up 30 percent since Jan. 1, after falling 40-45 percent in the last four months of 2008.
As a result of slack demand, PE makers and buyers alike are playing a conservative strategy, one they also may play in 2010.
“Everyone through the entire chain is managing inventory a lot closer,” Taylor said. “In the last four months of [2008] with costs and prices going down, everything was written down almost on a daily basis. Finances were terrible. Now everyone is saying, 'That's not going to happen to me again.' There's no big buildup of inventory.”
Wright saw the same conditions at Dow: “Credit has reduced the financing of working capital and that's keeping inventory low,” he said. “What happened in the fourth quarter last year is prevalent in everyone's mind. We had high-cost inventory that had to be sold at lower prices. That's keeping everybody on edge and keeping inventories low.”
At RTI, Burns countered that PE makers might try to build inventories in early 2010 “until they see that demand is still low and say 'Now what do we do?'”
On the buyer side, Burns said some PE buyers can't build inventories even if they want to, because they no longer can access credit or bank financing.
“That's been one of the biggest changes,” he said. “It's helped keep demand down. Buyers aren't buying resin they don't need.”
PE market analyst David Anderson of Townsend Solutions in Houston thinks that North American PE demand in 2010 will be the same as 2009.
PE capacity totals also should remain unchanged in 2010, even though the market is oversupplied, Anderson said via e-mail.
Rare bright spots for PE in the eight-month sales report included sales of HDPE into blow molded liquid-food bottles (up 9 percent) and blow molded household chemical bottles (up almost 5 percent). Sales of LLDPE into shrink/stretch film also were up 1.5 percent.
Westlake is focusing its new product actions in three specialty areas: PE waxes for hot-melt adhesives and similar products; tie-layer copolymer resins; and grafted products that use LLDPE with maleic anhydride in food packaging and pouches.
At NPE2009, Dow unveiled a lineup that Wright said was the largest the firm ever had debuted at that showplace gathering.
Included on the list were new grades of Dowlex-brand LLDPE and of continuum-brand HDPE for blow molded bottles, drums and other large blow molded parts.
Townsend's Anderson said that in 2010 he expects metallocene high-alpha-olefin LLDPE resins will continue to take market share from conventional ethylene vinyl acetate copolymer LDPE in numerous applications.
Where prices are concerned, Burns believes regional PE makers have moved back to profitability, based on feedstock and price, and have seen margins improve 4-6 cents in 2009.
Structurally, more changes could lie ahead for the North American PE field. Dow continues to look for a partner for its basic plastics unit, while LyondelBasell works to exit bankruptcy and Nova Chemicals Corp. is adjusting to a new Middle East-based ownership group.
“The industry tends to restructure at the top and bottom of the cycle,” Westlake's Taylor said. “So if you consider the industry to be getting close to the bottom, we could still see some restructuring in portfolios.”
Processors will watch these changes, but may not give them their full, undivided attention.
“I don't see converters changing their investment mindset because of a change in suppliers,” Wright said. “They make decisions to spend based on their own businesses.”
Polypropylene
As of August, North American PP makers definitely needed to stock up on thank-you cards for their export customers.
Exports boomed up 67 percent in those first eight months, tempering an 11 percent drop in domestic demand, and leaving the overall North American PP market with a sales loss of about 4 percent.
But that might be slight solace, since there's no guarantee that export levels will remain high in 2010. And if they don't, the domestic market might not provide any relief.
“I don't see [the domestic PP market] getting much better,” said RTI's Scott Newell, a PP market analyst. “Almost everyone [that] we talk to is reporting no type of rebound this year.
“Earlier in the year, a lot of them said they'd be down for a week or two weeks. Now they're shutting machines down completely or working short workweeks,” he said.
PP pricing also went absolutely haywire in 2009, mainly due to tight supplies of propylene mon-omer.
That tightness was the result of less propylene being produced from low-priced natural gas feedstock — instead of those based on crude oil — and of some unexpected production outages as well.
“I think volatility in polypropylene is here to stay for some time,” Dow's Wright said. “It's driven by monomer. Lighter feeds are preferred right now, and it doesn't look like the oil-to-gas ratio is going to change.”
As a result, average North American PP prices are up 70 percent since Jan. 1, after falling 55 percent in the last four months of 2008.
The regional PP market also continues to grapple with excess capacity, in spite of recent shutdowns.
“The market is more in balance now than it was, but not all of the excess capacity has been taken out,” Wright said. “Higher-cost facilities are likely to be taken out and rationalized.”
Newell added: “There's about 3 billion pounds of excess capacity, but producers have throttled so far back on production that you can't really say the market's oversupplied. Producers realize that if they lose their grip on production, they can't pass on price increases.”
At the CMAI event, PP analyst Esteban Sagel said that regional PP makers “showed discipline by only producing what was going to be consumed, limiting inventory buildup and controlling their feedstock purchases.”
As a result, days of PP inventory at the producer level fell from an average of 39 days to 30 during 2009, he said. Sagel added that North A-merican PP operating rates could remain around 80 percent through 2010, a level that he described as “unhealthy.” Higher PP prices caused by high monomer prices also could diminish PP's status as an inexpensive resin, he said, and create more competition from polystyrene and PET.
“North America is moving to the top of the PP price chain,” he said. “That's going to be a difficult issue for the industry to face in the next couple of years.”
There were some isolated rays of light in the eight-month PP sales report. Regional sales of PP into injection molded consumer products were up 2.5 percent; sales of PP into injection molded cups and containers were up 13.5 percent.
Dow is looking to tap into that market with new grades of high-clarity PP for cups, lids and food storage.
The regional PP field also may gain another competitor, if Houston-based ConocoPhillips Co. opts to go on its own to sell material made at a plant it owns in Linden, N.J. That plant's output has been sold by LyondellBasell, but the agreement between the two firms expires at year's end.
PVC
The North American PVC market is learning what it's like to be homeless. Or at least houseless.
That's because U.S. housing starts are on track to total around 600,000 in 2009 — a far cry from the 2.1 million level they hit in 2006. With building and construction traditionally accounting for 60-70 percent of all U.S./Canadian PVC sales, there's almost no way the industry can compensate in a housing market this weak.
“We expect to ship more PVC in 2010,” one longtime industry executive said. “More homes should be built, but we're starting from such a low base that, even with a few percentage points of growth, the number of pounds would be pretty small compared to the size of the existing infrastructure.
“You read about future homes being smaller, but those tend to favor PVC because of cost and economics. Smaller homes are more likely to have vinyl siding and flooring.”
Through August, U.S./Canadian PVC sales were down 12 percent, even with export sales up 7 percent, according to ACC. Even with modest improvement in 2010, the North American PVC market may have larger structural issues to contend with.
“The magnitude of capital investment in this industry often gets overlooked,” the executive said. “There are billions of dollars in investments making [vinyl chloride monomer] and PVC resin and pipe, and right now there's no margin in any part of chain. That's billions of dollars in assets creating no margin. How do you justify that?
“We need to come to grips with how we operate,” he said. “Even if a resin maker's involved in pipe production, that's not supporting their caustic soda and ethylene units. This has to change, or there's no choice but to eventually come down. That's the essence of the struggle in the industry right now. We need to turn into something that's profitable and sustainable for the long-term, because right now it's not.”
The North American market also remains long on supply, even after recent plant closings from Georgia Gulf Corp. and OxyVinyls. At the same time, Shintech Inc. has new capacity set to come on line in Louisiana, even thought it is not needed in the current market.
CMAI's Vafiadis said that in 2009, there's been “a disconnect” between PVC market activity and resin prices, as prices have gone up even as demand lagged. He cited a slumping market for caustic soda — which, like PVC, is part of the chlor-alkali production chain — as a reason for the confusing PVC situation. The poor caustic market caused less raw material to be available for PVC use.
Vafiadis also projected that North American PVC operating rates could remain under 80 percent in the near future, a level that, he said, “typically suggests very poor market conditions.”
For regional operating rates to return to a healthy level of 90 percent, Vafiadis said that almost 3 billion pounds of capacity would have to be removed. The PVC/ caustic balance also might keep prices on the high side for the foreseeable future.
“There are a lot of price pressures on PVC,” Vafiadis said. “The reality of higher PVC prices is here to stay.”
Average North American PVC prices are up about 15 percent since Jan. 1, after falling 22 percent in the last four months of 2008.
The industry's five remaining North American producers also are expected to remain in place.
“If a PVC maker has made it this far, they're already a low-cost producer,” the executive said. “They have to be able to survive.”
In separate markets, the executive said that 2010 should be another strong year for exports. He also said he expects PVC to do well in the window market next year, and to gain traction in decking. Medical business should be steady and sales into food applications are strong, he said.
Polystyrene
North American polystyrene makers remain in a dream where they can't stop falling. 2009 is on track to be the fifth consecutive year that the market experienced declining sales volumes. Through August, regional sales were down almost 15 percent, ACC said.
And yet, 2010 holds the promise of new hope.
“With polystyrene raw material costs easing, and a steadily but slowly improving economic outlook, we expect that sales will show improvement in 2010,” Total Petrochemicals USA's Tim Coffy said via e-mail. “We feel that most converters are actively managing their working capital to keep inventories low heading into the last part of 2009 [and] will be prudent in their purchasing,” added Coffy, senior PS marketing manager at Houston-based Total.
“Having said that, we also feel that industry inventories are very low. [And] some indications suggest that the economy has bottomed out.”
PS analyst Greg Smith at RTI said the North American market “might be getting near the bottom,” but he “doesn't expect much of a rebound in 2010, with sales flat to slightly down vs. 2009.”
“A lot of [PS] business has shifted to polypropylene,” Smith said. “And a decline like this takes a long time to complete itself. I don't see it continuing to disappear at the rate it has been, but it's a question of where it will stabilize.”
Some of that stabilizing growth could come from the “steadily returning” durable goods sector, according to Total's Coffy.
“As building and construction, automobiles and other related demand improves, so will PS demand,” Coffey said. “Food packaging will show gains as well, as disposable income returns, after people pay down their debt and employment improves.”
In pricing, average North American PS prices were up 25 percent since Jan. 1 after falling almost 40 percent in the last four months of 2008.
Even after substantial capacity shutdowns in recent years, the North American PS market remains oversupplied.
“There are still some under-utilized assets in the market right now,” Coffy said. “The capacity reductions that occurred in 2009 were necessary, but overcapacity remains a problem for the polystyrene industry.”
One factor that could add optimism to the PS sector is the rise in PP prices, which could make PS more competitive on a cost basis, according to Sagel at CMAI.
“Polystyrene may move to parity with polypropylene, and that's making the outlook for PS demand better than it has been in the past,” he said.
Sagel added that the North American supply/demand balance actually is better than in some parts of the world, partly because the concentration of capacity into the hands of five major suppliers has made it easier for producers to rationalize excess capacity.
North American PS operating rates were around 80 percent in 2009, but should improve to near 85 percent in 2010 and remain there through 2014, Sagel said.
PET
Compared to the other members of the Commodity Resins Club, PET is doing just fine.
Some market watchers expect 2009 to end with North American sales growth of 1-3 percent, and believe that a similar growth rate can be reached in 2010 as well.
“In the case of PET, there are offsetting factors,” said Tom Sherlock, resins business director with DAK Americas Inc. in Charlotte, N.C. “The single-serve beverage market has been hit pretty hard, especially in convenience stores, where 95 percent of what's in glass refrigerators is bottled in PET. Those products are high-priced and discretionary.
“But in the thermoforming market, consumers are moving down-market in restaurants and they're taking meals home in PET containers,” Sherlock said. “The [PET] market is always relatively recession resistant.”
Edgar Acosta, a PET analyst with DeWitt & Co. in Houston said organic growth is pushing the market. “Coke and Pepsi are still buying,” he said.
“The market eventually could get back those 5-8 percent growth rates, but the fundamental problem is societal change in the view of plastics in general,” Acosta said. “Plastic use in packaging could be in a downward trend. But the reality is what it costs. And I don't see how a lot of these companies can find a less-expensive material that performs like PET does.”
CMAI PET analyst Chase Willett said the North American PET market could post its second consecutive demand loss in 2009. He added that poor demand growth, new capacity and Asian imports “will keep PET margins at break-even for the foreseeable future.”
The region is looking at more than 2.5 billion pounds of excess capacity unless more existing capacity is removed, Willett said.
“The market probably needs at least one rationalization — maybe two — but that's not an easy decision to make,” he said.
But Willett added that, in spite of the excess capacity, PET prices will continue to be “whip-sawed” by changes in raw materials costs because margins are practically non-existent. Average North American PET prices were up about 15 percent since Jan. 1, after falling 35 percent in the last four months of 2008.
North American supply will be affected by the ramping up of a new plant commissioned by Indorama Polymers Public Co. Ltd. in Decatur, Ala. That plant should create “a measured increase in supply,” according to DAK's Sherlock, but it won't eclipse recent capacity shutdowns by Wellman Inc. and Invista.
The impact of lightweighting — where many bottle makers reduced the amount of PET used in each bottle by 30-50 percent, largely in response to high resin costs — continues to hang over the PET market.
Acosta at Dewitt said the trend “may have run its course,” but he doesn't see many bottlers investing in new capacity.
CMAI's Willett said that because of lightweighting and increased use of recycled-content PET, North American virgin PET demand isn't likely to return to 2007 levels until 2015.
Market watchers also pointed out that although beverage giant Coca-Cola has lightweighted most of its product line, arch-rival Pepsi-Cola has yet to do so, meaning there could be more PET taken out of circulation.
Potential high-growth markets for PET, according to Sherlock, are ready-to-drink black, white and green teas and thicker-wall, high-clarity custom bottles for personal-care, health and cosmetic products.
On the new-product front, Sherlock said DAK will have new PET barrier resins available by the end of 2010. The new materials are aimed at carbonated soft drink bottles of 10 ounces or less and offer improved carbon-dioxide performance, he added.
Nylon
The number of cars and light trucks rolling off North American production lines is a fraction of its former self. Yet the nylon market — which benefited from automotive growth for many years — soldiers on.
“When you add it all up, given the economic downturn, we still expect no real growth in 2009 vs. 2008,” said Dave Donofrio, global nylon product manager at nylon market leader DuPont Co. of Wilmington, Del. “But that's driven more by overall economic challenges than the marketplace value for nylon.
“The drivers and value for nylon, in particular, have never been stronger, as the auto industry strives to reduce weight for better fuel economy and reduced carbon emissions,” Donofrio said in an e-mail response. Nylon also remains attractive in industrial and consumer markets, where customers want to take out cost and improve functionality, he added.
In 2008, North American nylon sales fell under 1.2 billion pounds for the first time since 2001. The 2009 number is likely to be lower still, but Donofrio said DuPont has seen positive signs in the third quarter of the year.
“We're seeing a significant increase in demand that started in the third quarter, and that increase in demand has been across all markets, including auto,” he explained. “A portion of it appears to be restocking of inventories throughout the supply chain, as the demand is significantly higher than the underlying industry sales increase, such as auto builds.”
Even though regional operating rates were below 80 percent in 2007 — the last year for which data was available — Donofrio contends the market is balanced from DuPont's point of view.
“We believe we are balanced, based on customer forecasts and other planning inputs,” he said. “We do manage the supply and demand matrix globally to ensure we meet the regional needs of the market. We don't see any need to change our current plan.
“At the same time, we do continue to see tightness in the nylon intermediates marketplace upstream of our production facilities, and we continue to work through that tightness to meet customer needs,” Donofrio said.
Even as nylon makers work to look outside of the automotive field, they can't turn their back on the sector that accounted for 35 percent of 2008 domestic sales.
“Long-glass nylon is taking off, where before it had been static,” said Bob Eller, president of Robert Eller & Associates in Akron, Ohio. “Under-hood is a plus factor [for long-fiber nylon], but it's being challenged by long-fiber polypropylene in intake manifolds.”
The auto industry is focused on reducing carbon dioxide emissions and improving fuel economy, Donofrio said. “The needs for nylon, then, are increased resistance to heat and chemicals for more metal replacement under the hood — super-tough and load-bearing capabilities for structural parts. ... So the higher-performing nylons are in the best position to help automakers meet these increasingly challenging requirements.”
The 2010 nylon resin market will be affected by the entry of Invista, the Wichita, Kan.-based Koch Industries unit that plans to make nylon resin at plants in Tennessee and Ontario.
Eller said Invista might be able to enter the market “with big guns and favorable prices” because of its parent company's experience in commodity markets. But CMAI nylon analyst Paul Blanchard pointed out that Invista is unlikely to have the product approvals it would need to make an immediate splash in the market.
Longer-term, the entry of Invista may change the way in which other nylon makers operate, Blanchard added.
“Eventually, we'll see a culture change in how nylon is priced,” he said. “Invista will have a more cost-based approach, instead of the value-based approach used by DuPont and other companies,” he said.
“It's going to be interesting, because Invista will be the low-cost provider in the world. That will be good for people who buy nylon, but maybe not so good for those who want to develop new applications with a nylon maker, because there will be less margin.”
Blanchard also said he believes the market is poised for a recovery, with North American demand growth averaging more than 6 percent through 2014 and North American operating rates improving from their current 70 percent level to almost 90 percent by 2014.
In new products, Donofrio said DuPont is seeing increased customer interest in nylon grades that have “significant amounts” of renewable content. Customers also must have non-halogenated, flame-retardant nylons to meet environmental regulations in the electrical/electronics market, he said.
Even with growth elsewhere, an adjustment to a smaller North American auto market is needed.
“I don't think we'll ever get back to the peak, which was more than 16 million builds,” Eller said. “But the automotive business will be more profitable. There will be less capacity and less liability. Automakers can break even at 10 or 11 [million builds]. But the market is very saturated.”
Polycarbonate
Three markets — automotive, building and construction, and optical media — that account for almost half of North American PC sales were down in 2009. PC producers understandably are hoping for better things next year.
“You can look at 2009 as a good year and a bad year in some respects,” said Bill Russell, Lexan-brand PC product manager for Sabic Innovative Plastics LP in Pittsfield, Mass. “It was an extremely difficult first half of the year, with volume down up to 50 percent in some markets. But we saw some signs of recovery in the third quarter.
“Auto builds for the second half of 2009 were above where they were in the first half and they could be at similar levels in 2010,” he said.
The North American PC market could return to single-digit growth in 2010 after posting a “high-single-digit” loss in 2009, Russell added.
He cited auto window glazing as “a very credible market opportunity” for long-term PC growth. He also singled out sustainable efforts, such as a carbon-neutral cell phone made by Motorola using post-consumer PC and Sabic's copolymer technology.
At Bayer MaterialScience LLC of Pittsburgh, Sam Stewart said sales into the medical sector have grown throughout the year as a result of new products. Since May, demand also is up in consumer, electrical, electronic, appliance and transportation segments, said Stewart, who serves as BMS North American sales and marketing vice president.
In automotive, the trend toward lighter-weight, more fuel-efficient vehicles “bodes well for plastic materials,” Stewart added.
Market analyst Eller sees more North American PC work continuing to shift to Asia, as has happened with ABS.
“You can't be in the [PC] market without low-cost manufacturing,” he said.
At the CMAI event, PC analyst Adrian Beale said PC makers have had difficulty raising prices in 2009 because of weak demand. In the optical-media market, purchasing power is concentrated in the hands of a few major buyers, leading to lower prices for that grade of PC.
“Increases in costs aren't reflected in price,” Beale explained.
The optical-media market for PC — including CDs and DVDs — continues to struggle as more and more consumers download music and movies in digital form. Beale anticipates that electrical/ electronics will bypass optical media as the world's largest PC end market by 2014.
The market for PC water bottles also was battered in 2009 by concerns over the safety of bisphenol A feedstock, but market watchers pointed out that the sector accounts for less than 5 percent of regional demand.
In spite of weak demand, new PC capacity is set to begin operating in Russia, China and Saudi Arabia, although Beale said some of those projects might be delayed.
As it stands, global PC operating rates are on pace to be under 70 percent through 2014, which may lead to some capacity closings. Even in a soft market, PC customers continue to look for better solutions.
“The process of introducing a new product hasn't changed,” Sabic's Russell said. “The total scope of projects might have narrowed, but there are still opportunities there. If you can make lower-cost improvements, customers still will change.”
TPEs
The ever-growing families of thermoplastic elastomers pride themselves on specialty applications, but they're not immune to larger economic factors.
“There's still a lot of end-use manufacturing being shifted to Asia,” Eller said. “That's knocked two points off the growth rate for TPEs. The market will still grow next year, but probably no more than 6 percent.”
Sales of thermoplastic polyurethanes are expected to improve in 2010 — after dropping 35 percent this year — but will remain shy of the 2007 market peak, according to market veteran Roger Huarng. He and Stephane Morin — each with almost 20 years of experience at BASF Corp. — recently launched Alliance Polymers & Services LLC, a TPU distribution firm in Romulus, Mich.
“TPU sales will improve because the economy is on the verge of recovery,” Huarng said. “The companies that will recover first will be much-faster and smaller private companies.”
Eller added that TPE penetration rates are increasing in auto body seals, and building and construction seals. The TPE field also remains subject to intramaterial competitions, such as styrene ethylene/butylene styrene vs. olefinic TPEs, thermoplastic vulcanizate vs. rubber and SEBS vs. ethylene propylene diene monomer.
Moving forward, Eller said he expects North American TPE firms to add compounding capacity, but not resin capacity. He also expects Wickliffe, Ohio-based Lubrizol Corp. to benefit from its recent purchase of a TPU product line from Dow.
“Lubrizol now has a broad product line and a broad range of products,” Eller said.
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