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Articles from 2016 In June


Auto electronics, electric vehicles boost demand for high-performance specialty resins

Auto electronics, electric vehicles boost demand for high-performance specialty resins

The amount of electronics found in all areas of modern road vehicles continues to increase, and electric drive systems are now entering the mainstream. So the need to ensure the reliable performance of electrical and electronic components and systems is taking on new importance. Polymer-based solutions from Henkel are providing high levels of protection for different types of such components.

Countless safety systems in cars and trucks now depend on the continuous high-level functionality of interconnected electronic components, often positioned in areas that are exposed to wide temperature variations, to oils and greases, to moisture, dust, stone impacts, and vibrations. For these reasons, it is important that, wherever possible, electronic and electrical components are securely protected from the environment.

Hot melt molding and potting are among the processes employed by automakers to protect sensitive electronic componentry.

Solutions available from Henkel include: Technomelt low-pressure moldable hot-melt polyamides for encapsulation of plugs, sockets, and sensors; Loctite acrylic impregnation resins for sealing microscopic gaps in metal/plastics hybrid components; and thermally conductive potting resins for electric propulsion components.

In the low-pressure hot-melt molding technique, resin is injected around components fixed in a closed mold. The hot-melt serves as an encapsulant and also as a housing, so there is no need for a separate shell to protect the components. Once the hot-melt material has cooled and solidified, the components are ready for further processing.

Resins for hot-melt molding are single-component polyamide systems that can be used in simple and clean production processes. These processes take up little floor space, they are fast and energy-efficient.

Henkel Technomelt hot-melt molding materials provide high humidity resistance, temperature resistance up to 150°C, and impact resistance down to -50°C. This makes them superior to many other polyamide hot-melts, which normally can be used in environments of up to only 120°C and are more prone to hydrolysis.

The new materials from Henkel are the result of experience in hot-melt molding for the automotive industry that dates back over 25 years. They provide new opportunities for higher temperature applications in humid environments, such as sensors in door handles, rear view cameras, batteries or tire pressure monitoring systems, or for sealing aluminum cables.

Further, acrylic impregnation products such as Loctite IS 5100 provide a sealing solution for electrical and electronic components. Microscopic voids are inherent in many electronic assemblies that combine metal and plastics elements. Over time in the field, these voids can cause product failures, so it is important that they are filled before the parts are put into vehicles. Henkel offers an impregnation service, either on-site or at its own service centers, for permanently sealing parts such as sensors, connectors, coils and electronic housings. Once impregnated, these components are protected from moisture, solvents, fluxes and other corrosive agents.

The impregnation process involves placing parts in a vacuum chamber, which is then filled with the acrylic resin. Once this has filled all the gaps in the parts, excess resin is removed by a centrifuge and parts are then thoroughly washed and rinsed before the remaining resin is allowed to cure. All parts go through a leak test to guarantee that the process has sealed the parts.

Impregnation is a fast, high quality, cost-effective sealing solution that can be used on existing parts without any need for design changes. Once treated, parts have the same dimensions and surface aspect as untreated parts, but their durability and long-term reliability is considerably improved. The specially developed acrylic resin protects against moisture, chemicals and dust, and remains flexible, retaining its sealing properties, throughout multiple thermal cycles. The process is unique to Henkel. Since it is offered as a service, customers do not need to invest in any capital equipment.

Henkel’s thermally conductive potting materials are intended for electric vehicle propulsion components that require support in dissipating generated heat. Today’s compact high-performance electric propulsion components have a high power density. This inevitably leads to the generation of heat, which must be discharged to the cooling system on the outside if reliability is not to suffer. Henkel offers a variety of thermally conductive and electrically insulating potting materials that meet the technical and processing requirements of this application.

Dow announces layoffs, plant closures

Dow announces layoffs, plant closures

Dow Chemical Co. (Midland, MI) plans to cut 2,500 jobs globally, or 4% of its workforce, as part of a deal to assume full control of Dow Corning silicone venture.

The chemical giant will shut down silicones manufacturing facilities in Greensboro, North Carolina, and Yamakita, Japan, as well as certain administrative, corporate and manufacturing facilities to further enhance competitiveness and streamline costs associated with the transaction.

"We are moving quickly and effectively to integrate Dow Corning and deliver the synergies that will drive new levels of value creation for our customers and generate even greater returns for our shareholders," Liveris said in the statement.

“With these difficult but necessary actions, we are bringing together the best of each company’s talent and technology, accelerating Dow’s strategy to go narrower and deeper into attractive, targeted market sectors, and setting the stage for the new Dow—the world’s leading material science company.”

Dow Chemical said it would take a charge of about $410 million to $460 million in the second quarter for asset impairments, severance and other costs, which are expected to be completed in the next two years.

Annual cost savings from taking over Dow Corning will total $400 million, a 33% increase from a previous estimate, and the deal will bring in $100 million in additional growth, the company said.

These actions position Dow to achieve its cost synergy target run rate of 70% within one year of closing the Dow Corning deal, and 100% within two years. In addition, the Company continues to focus its efforts on capturing significant growth opportunities driven by broader product offerings in key business areas, cross-selling opportunities and expanded R&D capabilities to commercialize innovations faster.

Next target for the anti-plastic crowd: Your garden hose

water play

Advocacy group the Ecology Center (Ann Arbor, MI) has just released a new study that shows many plastic garden and yard water hoses contain high levels of toxic lead and phthalate chemicals. The new research discovered that half of the PVC hoses tested contained electronic waste (e-waste) vinyl contaminated with toxic chemicals.

Image courtesy chrisroll/
freedigitalphotos.net.

The researchers tested 32 garden hoses from six national retailers, including The Home Depot, Lowe’s and Amazon, for lead, cadmium, phthalates, bromine (associated with brominated flame retardants), PVC, antimony and tin (indicating oganotins). Water from select hoses was also tested. Such chemicals, said a press release announcing the study’s results, have been linked to birth defects, impaired learning, liver toxicity, premature births and early puberty in laboratory animals, and hormone disruption among other serious health problems. Results were released last week at www.HealthyStuff.org.

The report calls on national retailers and manufacturers to phase out the use of lead, phthalates and contaminated vinyl scrap plastic in garden hoses. “Even if you actively avoid putting harmful chemicals into your yard or garden in the form of pesticides, you could still be adding hazardous chemicals into your soil by watering with one of these hoses,” said Gillian Miller, PhD, staff scientist at the Ecology Center. “The good news is that none of these chemicals are necessary in garden hoses, and a number of safe hoses are available.”

It seems that nothing is safe from the plastic fear mongers.

This isn’t the first such report. In researching this so-called problem, I found that every summer—usually in June or the first part of July—Healthy Stuff releases its newest report on toxic garden hoses. This is to ensure you get your summer off to a fearful start. These reports go back as far as 2012, with one appearing on July 3, 2014, then updated on June 29, 2015.

Other publications pick up these reports and re-publish them as “science,” which is what mercola.com did,  when it published Healthy Stuff’s study in its June 24, 2014, online publication. Dr. Mercola goes through the usual laundry list of all the toxic chemicals that plastics contain, and explains why people should use alternative materials such as “glass dishware, storage containers and drinking bottles in lieu of plastics.” He’s at least smart enough to note that there are no “glass garden hoses.”

Supposedly, watering your garden with one of the toxic hoses sprays your vegetables with toxic chemicals that leach out of the hoses and into your food, especially in summer when the water running through the hoses is hot. Dr. Mercola recommends letting the water run until it’s cold because “the water that’s been left sitting in your hose, and heating up in the sun, will be the most chemical-laden.”

In Arizona that would mean letting water run somewhere (into the ground where it goes into the soil and ultimately into underground aquifers? Or into the gutter on the street and into the city water system?). But that means a lot of wasted water, and we live in a world in which potable water is becoming in short supply. In the deserts of the Southwest, we’re encouraged not to waste water but to conserve it. I’m not sure how “green” the good doctor’s advice really is.

On one website, Free-Range Kids: How to Raise Safe, Self-Reliant Children (Without Going Nuts with Worry), I found an excerpt from a book by Julie Gunlock (her real name—not a political statement, the heading notes), From Cupcakes to Chemicals: How the Culture of Alarmism Makes us Afraid of Everything and How to Fight Back. She writes:

“A few years ago I was watching the news and was shocked to learn that my garden hose was incredibly dangerous. Say what? The newscaster anchoring the program that night seemed really upset about this story. He leaned forward in his seat, stuttered . . . and . . . wait . . . did I see him tear up? Did his voice just crack? Oh my gosh, he’s going to cry!

This.is.a.serious.problem. SOMETHING MUST BE DONE! NOW!

Yet the facts behind the ‘killer garden hoses lurking in your backyard’ are hardly scary. The news story centered on the fact that most garden hoses are made of polyvinyl chloride, better known as PVC. PVC has high levels of lead and other chemicals and, therefore, the claim was that since children and pets sometimes drink from garden hoses, they were getting big doses of toxins when taking the occasional sip.

But before you read any more, just think about it: Do children and pets really drink a lot of water from garden hoses? Is the garden hose a main source of water for children and pets? Are they drinking gallons of water this way?

. . . in general, kids do not get the bulk of their water in any given day—much less during their lives—from the garden hose.

I was lucky I had time to look into this story and question its merits. I was able to ignore the hysteria and consider the facts. And those facts are reassuring. Most garden hoses are indeed made of polyvinyl chloride, which is toxic if consumed in large quantities. Yet it is impossible—let me repeat that word, impossible—for a human to consume enough water to reach toxic levels of PVC exposure. Why is this impossible? Because the amount of chemical that leaches into the water is so miniscule that a person would have to consume massive amounts of garden hose water in order for it to be a problem. And if a person attempted to drink the amount of water required to reach PVC toxicity, they’d first die of dilutional hyponatremia—death by water overdose.”

Finally some common sense leaking through all the hype! Some of the findings from Healthy Stuff noted 100 ppm up to 68,000 ppm of lead in PVC hoses. While one of those numbers sounds really big, it is actually quite miniscule. BPA—the additive that these advocacy groups love to hate—was as high as 87 ppb (yes, that’s parts per billion). OMG!  Some were found to contain bromine (used in flame retardants just in case your hose catches on fire); antimony (a mineral found in batteries, glasses and pottery. Oops! Throw out the glassware and stoneware! The ancient Egyptians used it as eyeliner); and tin (don’t carry your water in a metal bucket—it might have tin in it).

The advice to “let the hose run until the water sitting in the hose is now in the ground” is a waste of water. Avoid the sun by storing the hose in the shade—sorry, but here in the desert southwest when it’s 115 degrees that doesn’t even work in the shade! In fact, that’s a good deterrent to drinking from the water hose in Phoenix because you’ll burn your tongue off! Talk about health problems! You’ll never taste a steak from the barbeque again! Oh, I forgot, charcoal briquettes are also toxic.

Darn! You just can’t have a good time anymore!

Prism Plastics’ acquisition of Tech Molded Plastics called a ‘combination of equals’

Prism Plastics

Prism Plastics (Chesterfield Township, MI), a high-precision plastic product company, has acquired Tech Molded Plastics Inc. (Meadville, PA), a full-service injection molding company specializing in tight-tolerance, precision molding and the manufacture of production injection molds. Prism is a portfolio company of Altus Capital Partners (Wilton, CT), which specializes in U.S.-based middle-market manufacturing companies.

Founded in 1973, Tech Molded Plastics focuses on precision injection molded components for the automotive, medical, consumer, electronics and aerospace industries. Tech Molded Plastics currently operates 37 injection molding presses ranging from 33 to 440 tons. Through the acquisition, Prism Plastics effectively doubles its size in terms of sales, and gives the organization immediate access to a proven and sophisticated team of professionals while adding in-house mold building capabilities.

“We’re confident that this acquisition will prove to be mutually beneficial in helping both organizations accomplish more together than they could have separately,” said Tech Molded Plastics CEO Scott Hanaway. “Prism Plastics has a strong reputation throughout the industry and we couldn’t think of a better company to align ourselves with moving forward.”

Prism Plastics President Rod Bricker, who is also one of Prism’s co-founders, said in his announcement, “Prism Plastics continues to experience a strong and steady growth trajectory fueled by our commitment to the Prism Way—an operational mindset geared toward lean manufacturing processes, automated technologies and embedded quality control measures that result in best-in-class standards of quality for our clients at every touch point. In acquiring Tech Molded Plastics, we recognized a strategic opportunity with a company that shares our philosophies regarding manufacturing, business, family and culture to further expand our capabilities and capacity to fuel future growth.”

A year ago, during an interview with PlasticsToday, Jeff Ignatowski, Director of Sales and Marketing, noted that Prism was looking to expand into other vehicle components, including opportunities for metal-to-plastic conversion, drive train, under hood, fuel system components and more. The goal was to add a fourth facility and, at the time, Prism was in the early stages of discussing where that plant might be located.

In an interview regarding the purchase of Tech Molded Plastics, Ignatowski noted that the acquisition turned out to be Prism’s next expansion, rather than a greenfield build. Bricker confirmed that statement: “We had planned to do something like a greenfield, but this opportunity came along to acquire Tech Molded Plastics, which was a good [one] for both companies.”

In commenting on the synergies between Prism and Tech Molded Plastics, Bricker pointed first and foremost at the team of people that contribute to the success of the companies. “Both have good groups of people that been in the plastics business for many years, and have extensive knowledge and experience. That’s one of the biggest synergies,” he stated. “This is two solid companies coming together—a combination of equals. We’ve made two great companies into a greater one.”

Tech Molded Plastics’ CEO Scott Hanaway affirmed that position. “We’ve got a diversified customer base, which brings a broader diversification for both companies, including some packaging and aerospace products. We’re strong in the automotive market, experienced in designing and building difficult, multi-cavity molds and offer moldmaking and design engineering in-house along with an apprentice program, which adds to the overall capabilities of the combined companies.”

Bricker agreed. “Prism doesn’t do in-house moldmaking, so that adds to our capabilities,” he said. “As Scott suggested, the overall customer base will be broader, and we have expertise in the same type of tough parts—critical mechanical products.”

Going forward, Prism will continue to look at areas of diversification in different markets. In addition to the unique markets that Tech Molded Plastics brings, Bricker emphasized that the company will continue to diversify into other industries and develop customers in other markets, with each company continuing to support the other. “We now have a larger portfolio of services and expanded capabilities to offer all our customers,” Bricker commented.

In addition to Tech Molded Plastics, Prism operates three other facilities including two in Michigan and one on the Mexico border in Harlingen, Texas. However, Bricker noted that Prism will be “cautiously looking at other opportunities,” always taking into account if it makes sense for the company’s overall strategy. The company currently ships more than a half-billion parts annually from its facilities in the United States.

Bricker added that while Mexico certainly offers business opportunities, “so far, with the types of products we make, we’ve stayed within U.S. borders. But as opportunities arise with customers, we’re always willing to talk about their needs. With the high level of automation in our plants, it doesn’t make sense at this point to put facilities in Mexico.”

SA Engineering opens state-of-the-art technology center

SA Engineering opens state-of-the-art technology center

SA Engineering (Livonia, MI) has invested in a new state-of-the-art technology center located in Livonia, MI, and has announced its grand opening during Engel’s (Schwertberg, Austria) trend.scaut 2016.

The inception of the SA Engineering Technology Center stems from a request from Original Equipment Manufacturers (OEMs) looking for a world-class facility, that could support the efforts of OEMs and tiered automotive suppliers who are looking at global technologies and interested in developing these technologies further for mass production consideration. It was determined by them that there was a need for a local Detroit facility, as opposed to traveling globally to conduct Design of Experiments.

The facility houses a number of technology partners under one roof, centrally located, with state-of-the-art equipment and technical specialists on site, to assist in bringing challenging projects to fruition. 

SA Engineering Technology Center’s mission is to be the top facility for new injection molding technologies targeting weight reduction, cost reduction and improved quality. The Center will co-develop and prove out repeatable processes for mass production.

Jim Osbourn, the Center’s Business Unit Manager said, “Our mission is to assist OEMs and Tiered Suppliers in determining the best technology to bring their ideas and objectives from concept, through trial, to final product.”

“The SA Engineering Technology Center is primarily automotive focused, but all the same principles and technologies could be applied to other industries. Our desire to create a center for development of advanced injection molding technologies is a perfect match with Engel’s aspiration to expand the envelope of injection molding techniques. They were clearly an ideal partner for this venture.”

                                                                                                                                                                                                                                                      Engel is the exclusive provider of state-of-the-art injection molding machines and automation for the SA Engineering Technology Center to assure the best equipment for trials.

The Center has selected Trexel for its lightweighting product development with MuCell and CFA’s. The MuCell capabilities are available on three state-of-the-art Engel machines with the latest T-series gas dosing systems: 285T Tech, 660T Wide Platen with core back, and 1000T Wide Platen with core back.  Trexel onsite technical staff will also provide R&D and mold trial support for customers interested in evaluating TecoCell.

 

 

 

 

 

 

 

 

 

 

 

 

 

BASF unveils compostable particle foam with high biobased content

BASF unveils compostable particle foam with high biobased content

Chemical producer BASF (Ludwigshafen, Germany) is expanding its range of high performance foam products with the innovative, certified compostable particle foam ecovio EA. The product is mainly biobased and supports the biological cycle through its certified compostability and will be on display at K 2016 in Dusseldorf (Hall 5, booth C21/D21).

The main areas of use for ecovio are plastic films such as organic waste bags, dualuse bags (first for shopping, then for organic waste) or agricultural films. Furthermore, compostable packaging solutions such as paper-coating, shrink films, foam packaging and injection molding products can be produced with ecovio.

The patented particle foam’s properties make it particularly ideal for transport packaging for high-value or delicate goods where a high level of impact resistance and robustness is vital. The product properties—similar to those of EPS—boast exceptional energy absorption and very good resilience even when subjected to multiple impact loads. The high biobased content and the certified compostability make ecovio EA particularly attractive wherever a fossil packaging solution no longer meets customers' requirements for a biobased and biodegradable transport solution.

ecovio EA is the first expandable, closed-cell foam material which is biobased and certified compostable. It consists of the biodegradable BASF polymer ecoflex and polylactic acid (PLA), which is derived from corn or other sugar-generating plants like manioc.

The particle foam is available in brown and is delivered to customers in an octabin where it can be stored there in appropriate storage facilities for at least six months without any quality impairment.

Compared to EPS, ecovio EA has lower rigidity and when it comes to its energy absorbing capacity it falls between EPS and EPP. These properties make this material perfect for use in the E&E sector as well, in particular for heavy and delicate packaged goods such as washing machines or televisions, which need to remain unscathed right along the transport chain even if they are subjected to multiple, heavy impacts.

Furthermore, ecovio EA has a minimum thermal conductivity of 34 mW/(mK) and is therefore also outstandingly suited to all thermal insulation applications in the transport sector. For example, ecovio EA helps to maintain the cold chain at all times for temperature-sensitive goods such as packaged vegetables, fruit, meat, frozen goods or even medicines. This effectively prevents the goods from being ruined.

Due to the inherent properties of the raw materials, ecovio EA can also be stored at temperatures of up to 100°C over a period of several hours and is therefore also suitable for hot-melt adhesive applications. In addition, ecovio EA also displays good resistance in solvents such as acetone. As a certified compostable product, it also does not contain any flame retardants.

In the future, BASF will also offer ecovio EA with approval for use with food. This will extend the range of applications to all of the areas in which foam is in direct contact with processed food. ecovio EA will also be outstandingly suitable as a (reusable) transport container for processed fruit/vegetables, fish and meat.

MedAccred publishes audit criteria for medical injection molding

Audit stock art

The MedAccred Plastics Task Group has released its first set of audit criteria. AC8160 MedAccred Audit Criteria for Injection Molding will be used during MedAccred audits conducted at companies manufacturing resin-based components via various processes including injection molding, insert molding, overmolding, injection blow molding, transfer molding and compression molding. The audit is designed to robustly assess a company's ability to consistently manufacture components that conform to the applicable technical specifications and customer requirements.

Image courtesy Stuart Miles/freedigital
photos.net.

MedAccred (Warrendale, PA) is a medtech-industry-managed program that provides supply chain oversight via standardized audit criteria. It is administered by Performance Review Institute (PRI), a not-for-profit organization that also supports the Nadcap accreditation program for the aerospace industry. Modeled after this successful 25-year-old program, MedAccred audits replace some of the routine critical process supplier audits conducted by many OEMs and contract manufacturers with a single audit, according to the organization.

The new audit criteria for plastics processing were developed by the MedAccred Plastics Task Group, which is composed of technical experts from Johnson & Johnson, Philips, Stryker Corp., Baxter Healthcare, Becton, Dickinson & Co., Boston Scientific, Medtronic, Mack Molding, BMP Medical and MTD Micro Molding.

PRI's Executive Vice President and Chief Operating Officer, Joseph Pinto, noted the importance of the new audit criteria for the MedAccred program, commenting: “The field of plastics manufacturing is extensive and involves a significant number of device manufacturers and their respective supply chains. Accreditation to AC8160 will enable companies to demonstrate their commitment to quality and their process expertise to existing and prospective customers."

PlasticsToday spoke with task group members Ed Kangas of BMP Medical and John Hastings of Johnson & Johnson about the MedAccred program at the Medical Design & Manufacturing West event in Anaheim, CA, in February about the initiative’s origin and objectives: “BMP Medical first injection molder to complete MedAccred audit program.”

Companies interested in gaining accreditation for plastics injection molding are encouraged to contact Justin McCabe, PRI's Plastics Staff Engineer for more information. Companies achieving accreditation will be listed on MedAccred's Qualified Manufacturers List.

Breakthrough coating makes shampoo bottles good to the last drop

Breakthrough coating makes shampoo bottles good to the last drop

It’s one of those common household annoyances—trying to squeeze the last bit of shampoo and conditioner out of the bottle to no avail. After a few valiant efforts, the bottle finds its way to the garbage with some product still left inside. And if you’re anything like me and spend quite a few dollars on salon brands, then this can really grate on you. Oh, and not to mention the bottle never gets recycled since it needs to be rinsed completely clean.

Now researchers at The Ohio State University have discovered a way to create the perfect lining inside plastic bottles to let soap products flow freely. They describe the patent-pending coating in a paper featured in the journal Philosophical Transactions of the Royal Society.

The method involves coating a plastic bottle with microscopic y-shaped structures that cradle the droplets of soap aloft above tiny air pockets, so that the soap never actually comes into contact with the inside of the bottle. The "y" structures are built up using much smaller nanoparticles made of silica, or quartz—an ingredient in glass—which, when treated further, won't stick to soap.

Image courtesy Philip S. Brown/Ohio State University.

"It's what you'd call a first-world problem, right? 'I can't get all of the shampoo to come out of the bottle.' But manufacturers are really interested in this, because they make billions of bottles that end up in the garbage with product still in them," said Bharat Bhushan, Ohio Eminent Scholar and Howard D. Winbigler Professor of mechanical engineering at Ohio State.

Coatings already exist to help food, but not soap, pour out of their containers, he said.

"Compared to soaps, getting ketchup out of a bottle is trivial. Our coating repels liquids in general, but getting it to repel soap was the hard part."

The team devised a method to spray-coat a small amount of solvent and ultra-fine silica nanoparticles onto the inside of bottles. Manufacturers already use solvents to change the texture of molded plastics, because they cause the surface of the plastic to soften a little. By mixing the silica and solvent, they were able to soften the surface of the polypropylene just enough that when the plastic re-hardened, the silica would be embedded in the surface.

Overall, waste is reduced and the consumer experience is enhanced.

The university hopes to license the coating technique to manufacturers upon further development—not just for shampoo bottles, but for other plastic products that have to stay clean, such as biomedical devices or catheters. The coating has already been applied to polycarbonate, a plastic used in car headlights and smartphone cases, among other applications.

Brexit will not adversely affect business, says Symphony Environmental

Brexit will not adversely affect business, says Symphony Environmental

Symphony Environmental Technologies, a UK-based additives manufacturer, expects few repercussions from the UK’s vote last week to leave the European Union. Nor does the company anticipate any negative effect from a weaker GB Pound.

Symphony, whose products include additives, concentrates and masterbatches designed to protect plastics against bacteria, fungi, algae, mold and insects, has developed what it calls controlled-life plastic technology which “turns ordinary plastic at the end of its service-life into biodegradable materials”. The latter product, however, is the subject of controversy, as many experts strongly question whether biodegradability truly occurs with the use of these additives. The EU has expressed concern that the presence of these additives causes the plastic to fragment over time into small particles which remain in the environment. The European Commission is currently examining the impact of the use of oxo-degradable plastic carrier bags on the environment and will report its findings to the European Parliament and the Council by 27 May 2017.

However, Symphony's products are mainly sold in US dollars, and to a lesser extent in Euros, to more than 90 countries around the world with most of them being outside the EU. In a statement released by the company, Symphony declared that “the Group is therefore not materially exposed to any changes in the UK or European economies, and our imports from the EU represent only a small percentage of the Group's total imports.”

 The statement went on: “As exporters, a weaker UK currency is beneficial for Symphony's business, as it helps to make our products more competitive in the international markets. The Group does not anticipate any negative effect on its current trade. Symphony's products and technologies are innovative and offer unique value for countries that need to make improvements to their environment, public health and food protection and to businesses which need to protect their brand against counterfeiting.

 Accordingly, the Board do not consider the UK's decision to leave the EU will adversely affect the business and believe the Group will continue to trade in accordance with market expectations.”

Weekly resin report: PP prices hit levels not seen since 2009

Cool Design

Although spot resin trading continued to improve, transactional volumes in June remained below the completed tallies of both April and May, reports the PlasticsExchange (Chicago) in its weekly Market Update. While polyethylene (PE) and polypropylene (PP) are experiencing very different market dynamics, they share slow demand in what has been a bearish period. The stunning UK vote to leave the European Union could generate an even deeper sense of caution, as resin market participants, and political/economic pundits in general, contemplate the impact.

Cool Design
Image courtesy Cool Design/
freedigitalphotos.net.

The spot PE market began to pick up, as resin availability increased and prices were lower across all commodity grades. Many processors withheld their large orders this month, limiting high-cost purchases while they tried to negotiate a price decrease for June contracts. Demand was a bit better the week of June 20, as some processors found their inventories drawn to uncomfortably low levels and simply required resin, notes the PlasticsExchange. Although higher volumes of PE transacted at lower prices this week, processors’ overall strategy did not play out perfectly. 

Producers kept their material offerings light during the past several weeks and the relatively snug conditions helped secure a price rollover for June. PE contracts began the year with a $0.05/lb decline during January and February, quickly added $0.09/lb in March and April, and held flat in May and June, so contracts are up a net $0.04/lb for 2016. With this month’s negotiations out of the way, the PlasticsExchange reports that it expects a heavier flow of offers into the end of the month and quarter, which could finally lead to a decrease. Processors would like to see that $0.04/lb unwind in July. Crude prices are retreating from their recovery rally while Brexit is stirring anxiety, so considering what follows, PlasticsExchange analysts think the PE market is now poised for a decline. 

PE supplies are improving. While some crackers and reactors still have persisting production issues, the vast majority of the turnaround projects have been completed and producers’ resin inventories have been growing. Exports are lagging: Producers have utilized the robust export market to balance off over-supply, but May’s exports were the lowest in 15 months, and while June is still in play, activity has been diminished. The strengthening of the U.S. dollar will not help. Moreover, the end of June and beginning of July is traditionally a slow period, as many processors take a vacation while reactors keep churning out more pellets. There should be some exciting month-end deals available. 

Spot PP trading was solid, with a healthy flow of both supplier offers and processor requests. The heightened activity translated to slightly lower prices and good transactional volumes. June PP contracts were mostly down $0.05/lb, with some variation seen by producer and product. Those contracts still with a monomer component would be impacted by the slight $0.005/lb increase in PGP contracts. Others might see a lesser decrease for copolymer products, particularly specialty grades. 

While the majority of the imported resins seem to have been sold, some imported PP copolymer resins are still lingering in warehouses around the country. However, the market is still reeling from the major surge in PP supplies; some demand had shifted away from consuming domestic production, which created a large surplus of generic prime railcars that required disposition. It is part of the process, and PP producers have been proactive to push the market cycle along to eventually regain pricing power. 

Producers aggressively lowered contracts to shut down the import arbitrage, regain market share and stimulate processor demand at attractive price levels not seen since 2009. At the same time, there have been several significant purges of inventory into the export market to help eliminate the supply imbalance. The PP market has fallen sharply during the second quarter: Contracts lopped off a full dime and spot prices eroded even more. While the market could potentially still slip some, PlasticsExchange analysts think there is limited downside at this point and foresee higher prices ahead once the market bottoms out and begins to recover.

Read the full Market Update on the PlasticsExchange website.