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L.A. bans plastic bags

Los Angeles became the largest city in the nation to approve a ban on plastic bags at supermarkets.

On Wednesday, the Los Angeles City Council voted 13-1 to phase out single-use plastic bags over the next 12 months at an estimated 7,500 stores, according to reports. After a year, retailers can charge 10 cents for paper bags. The city's program would be modeled after bag bans in other California cities.

This ban is expected to take effect later this year once a four-month environmental impact report of the bag ban is complete and the council adopts an ordinance.

"Los Angeles' bag ban ordinance is a significant step toward eliminating single-use bags around our state," said California assemblywoman Julia Brownley in a statement. "There is no time to waste in reversing the alarming 100-fold increase of plastic in the Pacific Ocean. I applaud the City Council for standing up to the plastic bag manufacturers who lobbied hard to defeat this ban and I will continue to work on a statewide ban to make an even larger dent in our plastic bag habit. All Californians benefit from a healthier environment."

According to a story by the Los Angeles Times, employees of plastic bag manufacturers had pleaded their case, and said they feared they would soon be unemployed. "My family depends on my job and my benefits, too," said Alejandro Ortega, a 10-year employee of plastic manufacturer Crown Poly.

The American Progressive Bag Alliance, an organization representing the United States' plastic bag manufacturing and recycling sector, which employs 30,800 workers in 349 communities across the nation, 1,900 of which are in California.

Prior to Wednesday's announcement, Mark Daniels, chairman of the American Progressive Bag Alliance, stated the association is "disappointed" by the Council's decision.

"By voting to move forward with this ban, the City of Los Angeles will place an onerous policy on its residents that puts the jobs of hundreds of Angelenos at risk who work in the bag manufacturing and recycling sector," he stated. "At a time when we should be creating more manufacturing jobs, this ban takes them away, while pushing people to imported reusable bags which are produced overseas and are a less-environmentally friendly option."

He went on to say the ban, "misses an opportunity to provide a more effective solution for consumers and the environment - programs that encourage greater recycling of plastic and paper bags and preserve jobs."

Ethylene, petrochemical prices plunge globally

ChemOrbis noted that the market is grim enough for producers that several cracker operators in Asia are considering run cuts in order to bring a halt to the freefall in ethylene prices.

In Europe, spot ethylene prices have also been on the decline since the start of May. Prices are off €70/ton going back a week, with a total decrease from early May of €160/ton.

ChemOrbis noted that overall ethylene supply is reportedly accumulating on the producers' side since there is almost no buying interest from the downstream derivatives market. Europe's economic woes, paired with cheap Middle Eastern cargoes and Mexican shipments arriving on the continent, have many players speculating there will be a large decrease for June ethylene contracts.
 
In the U.S., ChemOrbis reports spot ethylene prices have fallen $276/ton ($0.125 cents/lb), with a weekly decrease of $74/ton ($0.02 cents/lb; read more about recent moves in the North American market here.)

IHS Global Insight's Industrial Materials Price Index (GIIMPI), which represents a commodity price composite, fell 2.8% last week, one of its steepest weekly post-recession declines, according to IHS.

Within petrochemicals, IHS noted that front spot polyethylene prices, production cash costs, and demand are all declining, adding that "Commodity plastic resin prices have entered a period of correction that will last for the most part through the third quarter."

Do the falling prices reflect a broader shift in the global economy? No, not according to IHS. "Overall, the recent slip in commodity prices represents a change in sentiment more than a change in reality. Commodity prices are supported by high global production costs and soft, but stable growth out of the United States and China." IHS said materials with a less stable cost floor, like chemicals, will have a greater downside than those with a more stable cost structure, like many metals.

Russian fluoropolymer producer establishes operations in the U.S.

HaloPolymer Holding, a Russian manufacturer of fluorinated products, has set up operations in the U.S., establishing the first foreign office for the company.

The U.S. headquarters, HaloPolymer Trading, Inc., is located in Houston, TX while its warehouses are in Houston and New York, NY.

HaloPolymer CEO M.V. Doroshkevich told PlasticsToday the opening of the office is a strategic move aimed at expanding its customer base.

Historically, the U.S. market is one of the main fluoroplastic consumers worldwide, processing more than 20% of the total world output, he said.

"Despite significant production capacity in the country, a significant portion of consumption is covered by imports," Doroshkevich said.

For example, according to Doroshkevich, in 2011 the U.S. kept a dominant position in terms of total fluoroplastic imports worldwide and confirmed its position of one of the global market leading net importers.

"Not only the growth of the market and its import sector within the recovery period in 2010, but the positive changes in both values in 2011 are the key factors," he said. "That is why the U.S. is a key dynamic market for us and priority for the company expansion."

HaloPolymer is one of the world largest manufacturers of fluorinated products, primarily fluorinated polymers. The company owns 9% of the world's fluoropolymers market, and it ranks fourth in the world for the production of fluoropolymers.

The main task of the U.S. office is to increase sales of the PTFE grades as well as development of prospective fuse fluoropolymers sales to customers from North and South America, the company said.

"The opening of HaloPolymer representative office in the U.S. will provide advantages for company customers, such as a fixed price at the time of the transaction, no need to carry out customs formalities, and a significant reduction of products delivery time," Doroshkevich said.

He said the U.S. locations were chosen due to their proximity to potential clients. The company's key sectors include chemical and petrochemical, mechanical engineering, electrical engineering and electronics, construction, and the oil industry.

"The opening of HaloPolymer Trading provides a competitive market presence advantage, which makes it possible to increase sales, build business relationships and to strengthen the presence in the global fluoroplastic market," Doroshkevich said. "The employees of the U.S. representative office will rely on the existing connections and will establish new partnership relations in order to provide the consumers with quality products."

He said the Houston office plans to actively participate in leading exhibitions and conferences in the region.

TPU with a memory opens up new application areas

A new shape memory polymer based on a thermoplastic polyurethane (TPU) has been released with the ability to "remember" its original shape when heated to a certain temperature. Developed by Bayer MaterialScience and the BAM Federal Institute for Materials Research and Testing, Desmopan DP 2795A SMP has a switching temperature of approximately 40°C, with proposed applications including remote temperature sensors, artificial muscles, hinges, self-loosening screws, packaging, and shrink tubing.Bayer Desmopan DP 2795A SMP

Bayer and BAM recently submitted a patent application for a possible application in what they call "functional film tunnels and self-erecting structures." The concept being that film tunnels in a field act like greenhouses and accelerate the growth of vegetables so they can be harvested sooner than is possible if they were grown under the open sky. The companies point out that while it is easy to lay flat films on a field, erecting a permanent tunnel with films can be a time-consuming and costly operation.

In practice, profiles made of the new TPU are fastened to a transparent film while flat. After the film has been laid on the bed, the profiles are heated to the switching temperature and "remember" their bent, permanent shape and pop up to form a half-tunnel, lifting the films with them. "The mini-greenhouses are then ready for use," Bayer stated in a release.

Another potential market: product and brand protection applications. BAM has used the TPU for labels that engraved and colored quick response (QR) codes, so that the codes can only be read if the labels are in their permanent shape. Thorsten Pretsch, head of the BAM department for the investigation of shape memory polymers, said in this instance, the labels are well suited as a means of storing information to mark and identify products in a way that is very difficult to counterfeit.

The developers also point out that since the TPU is free from plasticizers and antihydrolysis agents, it is also suitable for food-contact applications, while maintaining all the typical advantages of TPU, including high abrasion resistance, flexibility, and good chemical resistance.

Existing shape-memory polymers include Composite Technology Development Inc.'s (CTD) Tembo family of thermoset (epoxy) shape-memory polymers and CRG's Veriflex epoxy and composite shape memory polymers.

Mold cavity fingerprints nab device counterfeiters

"Fingerprints" specific to a particular mold are now being used to help identify medical device counterfeits.  

At the heart of the approach is a patented Fingerprint technology from a Swiss company called AlpVision that enables companies to track and authenticate mass produced products manufactured in a mold with a scanner or an iPhone.

AlpVision (Vevey, Switzerland) and Nolato Medical  (Torekov, Sweden) are joining forces to use the technology and advance strategies to protect primary plastic packaging and medical devices from companies attempting to mimic their products with fakes-a crime wave now accounting for $600 billion globally.  

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An iPhone validates a medical cap with a reference image. Photo: Nolato
The Fingerprint process requires no change to the mold or the molding process. It involves capturing a digital image of the intrinsic microscopic surface irregularities found in a mold, then using that image as a reference to authenticate an entire production of molded parts, such as vials, containers and lids, test tubes and caps. To verify the validity of a product, brand owners use a standard office scanner or iPhone-like device.

"AlpVision's Fingerprint solution is a welcome addition to our company's product portfolio, which already consists of a range of tamper-evident caps. The solution can also be used for medical devices which need to be protected against counterfeiting," said Christer Wahlquist, president of Nolato Medical.

Martin Kutter, president of AlpVision, added:  "By combining Nolato Medical's knowledge with our Fingerprint technology, I strongly believe that we will be able to reduce the penetration of counterfeit pharmaceuticals into the legal supply chain and better safeguard patient safety."

AlpVision identifies itself as "the world's leader in digital invisible technologies for product authentication and counterfeit protection".

Some details of the Fingerprint approach are outlined in a U.S. patent awarded this month.

"Molded materials with a glossy surface are not very good candidates for the unique fingerprint technology because it is necessary to use very high resolution to model the differences between items," states the patent. "But if the molded material is a plastic and if it contains fiber glass, it becomes a very good candidate for the unique fingerprint technology because the fiber glass induces random patterns. It is possible to resolve details at a quite low resolution."

Another issue is that if a product like a cap, is produced in a mutli-cavity mold, or in multiple molds, many reference points are required.

One of the inventors listed on the new patent is Frederic Jordan  of Les Paccots, Switzerland, CEO an cofounder of AlpVision.

Nolato is a growing global presence in the medical business. Two years ago, it acquired Contour Plastics (Baldwin, WI) at a cost of $22 million. Contour Plastics, which changed its name to Nolato Contour. Nolato also produces plastic parts at plants in Sweden, Hungary and China.

More metal competition: GM China casts magnesium prototype part

The General Motors (Detroit, MI) China Advanced Technical Center in Shanghai has announced that its micro-foundry and formability lab successfully completed the initial low-pressure casting of a magnesium part, a milestone in lightweight automotive materials research.

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GM focuses on magnesium for lightweighting efforts.

The ATC team carried out the melting and casting of magnesium ingot materials and developed a prototype magnesium alloy control arm. The part, which is used in vehicle chassis systems, is 30 percent lighter than a similar part made from aluminum.  Lighter parts mean improved fuel efficiency for consumers whose cars in the future will be made up of more magnesium materials according to GM.

It is estimated that using magnesium, one of the lightest metals currently available, could result in a 7 percent improvement in fuel economy for every 150-kilogram (330 pounds) reduction in weight.

"Today's consumers want their vehicles to be more stylish, safer, more durable, more affordable and more fuel efficient," said John Du, director of the GM China Science Lab. "This is resulting in demand for lightweight yet strong materials that make a vehicle more economical to operate."

"The successful production of a part made from magnesium alloy is an important breakthrough for the ATC in lightweight automotive materials research. Satisfying the demands of our customers through new technological achievements is significant for GM's ongoing growth in China and the Chinese automotive industry."

The micro-foundry and formability lab are part of the first phase of the ATC, the Advanced Materials Laboratory. The facility includes a battery cell testing lab, battery material lab, metallography and electrochemical lab, and cell fabrication lab. It is initially focused on research in lightweight materials such as magnesium and battery cells to improve the efficiency of electric vehicles and other advanced technology vehicles.

The Advanced Technical Center is the most comprehensive advanced automotive technology development center in China. Its first phase opened in September 2011. The second phase is scheduled to open later this year.-[email protected]

Machine spotlight: Sipa introduces new preform system

After presenting its new preform system at NPE2012, Italian blowmolding machine manufacturer Sipa has received positive reaction.

"We actually did not expect the outstanding reaction we are getting," a Sipa spokesperson told PlasticsToday. "Since the NPE, the feedback from some of the major players in the preform business has simply been unexpected."

"The design of the system, its performances as well as the fact that it can install competitors' molds, represent very good arguments for many customers," the spokesperson continued. "We are now in serious discussion with most of the leading global players who, so far, never considered any alternative."

Sipa started engineering and manufacturing PET injection systems in 1989, and its first preform system was introduced in 1995. When designing its new preform system, Xform, the focus was to build a system capable of delivering significant advantages in terms of flexibility, long-term reliability, and reduced TCOs, according to the company.

"Our new preform system can use a very wide range of existing molds from leading producers with virtually no expensive retrofits, revitalizing older tools that in an older system are no longer cost effective due to their slow output," the spokesperson said.

Sipa's patented, two-sided post-mold cooling system holds preforms for four to six cooling cycles. The system features a robust and smooth clamping mechanism, capable of extending the mold life to over 8 million cycles. It also features up to 128 mold cavities for high output, and the mold change-over takes less than three hours, and a cooling system change-over takes less than a half an hour. The system can also handle up to 50% PET regrind (flakes) without the need for a special screw.

"We perfectly understand what happens after the preform is injected, how it is blown into a bottle, how it is filled, capped and packed for final delivery," the spokesperson said. "This know-how, delivers a unique capability in lowering packaging costs."

TPE resin prices, May 14-18: PE down $0.02/lb; PP falls $0.04/lb; Falling prices seen through June

Average polyethylene (PE) prices shed another $0.02/lb, while spot polypropylene (PP) prices dropped another $0.04/lb last week, as lower prices were welcomed by buyers filling in supply gaps from the inventory drawdown while awaiting this price relief. Spot-trading platform, The Plastics Exchange (TPE), noted that while there were many transactions, volumes remained small since the overall sentiment continues to be that the market will continue to ease. May PE contracts, although offered by producers down $0.04/lb, could ultimately settle with a larger discount. May PP contracts settled down $0.10/lb along with polymer grade propylene (PGP).TPE resin prices, May 18, 2012

Energy markets continued their recent trend of lower crude oil and higher natural gas prices. July crude oil futures, which are rolling to the front month, dropped $4.69/bbl to $91.80/bbl, the lowest level in about 6 months. July natural gas prices rallied $0.233/mmBtu to end the week at $2.822/mmBtu; so that it now sits about $0.70/mmBtu above levels from 30 days ago. The crude oil : natural gas price ratio contracted to 32.5:1, the tightest since December. TPE noted that the spread was at 51:1 just a month ago.

Ethylene spot prices fell further in what TPE called another "action-packed" week. Monomer supplies have increased as the turnaround season nears completion, with nearly 90% of total cracker capacity currently operational. Ethylene for May delivery shed $0.025/lb to last trade just below $0.52/lb. TPE CEO Michael Greenberg pointed out that just six weeks prior, spot ethylene was priced around $0.75/lb. Transactions were also seen in the forward months and while prices for the balance of 2012 remain pressured, the curve has flattened considerably. Ethylene for June delivery was at $0.5125/lb and July just a half-cent back. Material for delivery in the third quarter was around $0.50/lb with about a $0.02/lb discount needed to garner fourth quarter interest. Although ethylene margins have shrunk as the monomer price sunk. They are still very wide on a historical basis. Ethane ended the week just under $0.42/gal (almost $0.18/lb), providing the cracker with an inexpensive feedstock.

Polyethylene spot prices slid another $0.02/lb, pushing the market down $0.08/lb over the past six weeks. Falling energy and feedstock costs have contributed to the negative sentiment gripping the market. Producers have offered to drop May contracts by $0.04/lb and in the meantime have been generally willing to meet lower-priced competitive situations with downgraded prime material, according to TPE. Domestic purchasing is very sluggish as processors work down their inventories, causing producers' inventories to swell. The export market is very tough and currently not providing an ample outlet to offset these growing supplies. Houston traders are still caught with material and are just looking to unload quickly and mitigate losses, most are not ready to make new speculative purchases, regardless of price.

Propylene for May delivery fell all the way down to $0.53/lb, before jumping nearly 2-cents to $0.5475/lb and then ending the week offered in-between. After such a fast break from the high $0.70s/lb, the spot propylene market found relative value in the low $0.50s/lb, and the forward curve is now fairly flat, priced at similar levels throughout the balance of the year. These spot prices are well below May PGP contracts, which at $0.675/lb, were down $0.10/lb from April. This currently points to another double-digit decrease for June, but then the down-leg of the cycle might be played out, Greenberg pointed out. Refinery grade propylene (RGP) trading has been illiquid and was last indicated in the mid-to higher $0.40s/lb.

Polypropylene (PP) spot prices tumbled $0.04/lb as some of the market-leading whisper prices have become more widespread. May PP contracts settled down $0.10/lb, which priced branded prime PP homopolymer in the mid-high $0.70s/lb, but with plenty of generic prime resin available in the spot market in the high $0.60s to low $0.70/lb. Still, demand for generic prime is not robust even at sharp discounts, as buyers think June contracts could lose at least another dime. Good widespec railcars are mostly in the mid $0.60s/lb, lower quality PP resin can be bought in the low $0.60s or below. Offshore sales to Latin America are "limping along", according to Greenberg, who said fact is the "highlight of the dismal PP export market."

Final thought from Michael Greenberg

What goes up must (eventually) come down and now is the time for plastics. Hefty first quarter price increases, driven by tight monomer supplies due to mostly planned maintenance outages, brought the market to lofty levels that could not be sustained as the crackers began coming back to production. Processors bought heavily ahead of the increases and now that the peak price is past and downstream inventories are being drawn down, there is a vacuum in resin demand. Falling crude oil prices are lowering the floor for export sales, while soft and uncertain economic conditions have further curtailed international resin demand. The market correction is sharp and will continue into June, but from there the second half of 2012 needs to be evaluated. 

Mexico polyethylene plant receives loans approaching $2 billion

These resources, in conjunction with the $300 million already approved by the Inter-American Development Bank (IDB) in the month of April, will be part of a type A loan totaling $600 million. To this loan, there will be an additional $600 -750 million as a type B loan, which is in its final approval process, and the amount of $600 million approved by the Italian credit bureau, SACE.

Altogether, the loans total almost $2 billion.

The loans will be granted to the petrochemical producers to build and operate a plant that will have a capacity of producing 1 million tons of polyethylene, through an ethane cracker and three polymerization plants; two high-density polyethylene and one low density. Construction work started on May 18th. 

While loans are not easy to come by in this volatile economy, a Braskem spokesperson told PlasticsToday the project is able to get this amount of financing based on several fundamentals such as a market dealing with an polyethylene deficit.

Currently, the Mexican PE market has a production deficit of about 60% and depends on imports from other countries, mainly the U.S., to supply its growing PE demand, the spokesperson said.

"Once the project gets under way in 2015, we will definitely foresee a fundamental change not only for the Mexican PE market but for the entire country's economy because this project is focused on supplying the local market," the spokesperson said. "It will partially reduce the growing negative trade balance of ethylene-derivatives in Mexico."

In addition, the spokesperson said the banks strongly supported the project due to the competitive raw material ethane, the area's high-potential area for new reserves of petroleum and gas, along with a solid infrastructure for the distribution of the product.

The first of several North American projects

Howard Rappaport, senior director, global plastics for IHS Chemical, said the total of these loans approaching $2 billion is not unusual for a project of this magnitude, especially since there will also be a world scale ethylene cracker at the site along with other ethylene derivatives beyond the polyethylene.

"This is going to be the first of several new projects announced for the North American market to produce ethylene and polyethylene," he said. "With the development of shale gas resources in the U.S. yielding an increasing amount of ethane, the industry has announced between 8-10 million metric tons of new ethylene capacity slated over the next 5-7 years."

He expects that 50-60% of that new ethylene production will be converted into polyethylene.

"This new wave of production capacity is taking advantage of our low cost position based on natural gas, versus other regions in Europe, Asia and Latin America that use naphtha from crude oil," he said. "The U.S. will eventually have to become more of an exporter of PE pellets as this new capacity comes to fruition."

Xten Industries acquires assets of Paramount Plastics

in Lockport, IL. Founded in 1990, Paramount Plastics is an $18 million full-service injection molding company with 24 presses ranging from 60-2000 tons. While Paramount was founded as an automotive supplier for large-tonnage parts, the company also serves the industrial, consumer durable, health and fitness, and packaging markets as well, from its 122,000-ft2 facility.

Matthew Davidson, CEO and co-founder of Xten Industries, told PlasticsToday that his company had plans to expand its existing facility to accommodate two new 1500-ton presses. “That would have required new space, new cranes, and pouring thicker concrete floors,” Davidson told PlasticsToday. “While planning was underway, we were contacted by Paramount’s broker about a possible sale. Their available capacity matched up almost perfectly with our anticipated needs over the next three years. The rest is history.”

With the addition of Paramount’s capacity, Xten now has a total of 50 presses and 170 employees, which includes the 75 team members at Paramount. “In addition to the larger equipment, we’ve gained the operational expertise of Paramount’s people,” said Bill Renick, Xten’s president and operations leader. “Out of the due-diligence process, we came to realize how much they have contributed to Paramount’s success and feel fortunate to have them within the Xten family.”

While the acquisition of the assets of Paramount Plastics provides Xten with an entrée into the automotive market, automotive currently represents less than 10% of Paramount’s business base, according to Davidson. “Paramount’s primary business can be broken down into 27% consumer durable products, 71% hazardous waste/industrial products, and about 2% miscellaneous products,” he added.

“One of the qualities both Xten and Paramount share is our dedication to providing exceptional service,” Davidson noted. “Given this common focus, we’re certain Paramount’s current customers will notice no decline in our ongoing support.” Xten will maintain the name Paramount Plastics at the Lockport facility.

Xten Industries was founded in 1940 and moved to Kenosha in 2001, and today is a $45 million injection molding company and full-service product fabricator. The company offers many auxiliary services including part and tool design assistance, engineering, finishing, in-mold decorating, assembly, and packaging, along with inventory management and logistical support. The company has received the Future 50 Company of the Year for three consecutive years from the Council of Small-Business Executives of Metropolitan Milwaukee Association of Commerce. (You can read more about Xten in this four-part series on the company published in 2010).