Today Dow Wire and Cable announced price increases on several cable-manufacturing compounds. The increases will take effect October 1 and affect Dow's customers in North and South America.
Low-Density Polyethylene (LDPE) based specialty compounds, including flame-retardant and low-smoke/zero-halogen products will increase by 19 cents per pound.
LDPE jacketing and elastomeric insulation grades will increase by 12 cents per pound.
Select general-purpose grades will increase by 7 cents per pound.
Dow has made available to its customers this complete list of products within those three grades.
I have an inquiry into Dow asking what these cent-per-pound figures equate to for percentage-increases. Once I have that info I'll post it here as well.
As we reported, the three major suppliers of fluorinated ethylene propylene - FEP - have raised prices to cable makers and have either limited or allocated the supply of FEP they're providing. One of the three is leaving the FEP market next year. Everyone I've spoken to has been quick to point out that there is not an FEP shortage and that they are still able to produce cable in enough quantity to meet demand.
The FEP situation coupled with the increasing price of copper make cable price increases a near certainty.
In a previous blog post I rationalized why the FEP supply situation, like seemingly everything else in the world, ties back to China's production, consumption and export policies.
Thursday, August 26, 2010
Friday, August 20, 2010
FEP supply situation - Let's blame China
For several years China's ravenous consumption rate of just about everything has made an impact on supply-and-demand levels of, well, just about everything. In the past we have reported about the price of copper being affected by China's consumption of the metal for its infrastructure builds.
Today we reported on the double-whammy that we expect will increase the price of twisted-pair copper cable soon. In addition to the steadily rising price of copper over the past couple years as well as recent news of its expected further price jump, the supply of fluorinated ethylene propylene (FEP) has become an issue within the cable manufacturing industry. FEP is commonly called Teflon, the way facial tissues are commonly called Kleenex and the things we stick too far into our ears are commonly called Q-Tips. Teflon is Dupont's trade name for FEP, but cable manufacturers get FEP from two other suppliers as well - Daikin and Dyneon. At least, for now. Dyneon is exiting the FEP market early next year.
One of the three FEP suppliers packing up its gear to leave the market comes at a time when the production of a key raw material used to make FEP has fallen off. Fluorspar production is reported to have contracted 16 percent last year.
(This is the part where I start to blame China.)
A report from the United States Geological Survey indicates that China dwarfed all other countries in its mine production of fluorspar in 2008 and 2009. The report says that in June 2009 "the United States had requested World Trade Organization dispute settlement consultations with China regarding China's export constraints on numerous important raw materials. The dispute concerned China's policy that provides substantial competitive advantages for the Chinese industries using these raw materials inputs, including fluorspar."
For comparison's sake, China produced 3.25 million metric tons of fluorspar in 2008 and 3 million in 2009. United States production for those years, combined, totaled a big fat zero. The report also indicates that China has 21 million metric tons of fluorspar in reserve. The U.S.'s reserve is equal to its 2008 and 2009 output. What was that number again? Oh, right. Zero.
That may change, however, as about a week ago WKMS in Kentucky reported on the opening of what it says is the first fluorspar mine to go online in the U.S. in 20 years. In the story Michael Miller of the USGS, who authored the aforementioned report, explained that China exported approximately 200,000 of the 3 million tons it produced last year. He told WKMS, "It basically boils down to they're not exporting it because they're consuming most of it domestically in China."
China consumes like a teenager with an overactive pituitary gland. Don't those teenagers usually enter some kind of rebellion period that can wreak havoc on a household?
Today we reported on the double-whammy that we expect will increase the price of twisted-pair copper cable soon. In addition to the steadily rising price of copper over the past couple years as well as recent news of its expected further price jump, the supply of fluorinated ethylene propylene (FEP) has become an issue within the cable manufacturing industry. FEP is commonly called Teflon, the way facial tissues are commonly called Kleenex and the things we stick too far into our ears are commonly called Q-Tips. Teflon is Dupont's trade name for FEP, but cable manufacturers get FEP from two other suppliers as well - Daikin and Dyneon. At least, for now. Dyneon is exiting the FEP market early next year.
One of the three FEP suppliers packing up its gear to leave the market comes at a time when the production of a key raw material used to make FEP has fallen off. Fluorspar production is reported to have contracted 16 percent last year.
(This is the part where I start to blame China.)
A report from the United States Geological Survey indicates that China dwarfed all other countries in its mine production of fluorspar in 2008 and 2009. The report says that in June 2009 "the United States had requested World Trade Organization dispute settlement consultations with China regarding China's export constraints on numerous important raw materials. The dispute concerned China's policy that provides substantial competitive advantages for the Chinese industries using these raw materials inputs, including fluorspar."
For comparison's sake, China produced 3.25 million metric tons of fluorspar in 2008 and 3 million in 2009. United States production for those years, combined, totaled a big fat zero. The report also indicates that China has 21 million metric tons of fluorspar in reserve. The U.S.'s reserve is equal to its 2008 and 2009 output. What was that number again? Oh, right. Zero.
That may change, however, as about a week ago WKMS in Kentucky reported on the opening of what it says is the first fluorspar mine to go online in the U.S. in 20 years. In the story Michael Miller of the USGS, who authored the aforementioned report, explained that China exported approximately 200,000 of the 3 million tons it produced last year. He told WKMS, "It basically boils down to they're not exporting it because they're consuming most of it domestically in China."
China consumes like a teenager with an overactive pituitary gland. Don't those teenagers usually enter some kind of rebellion period that can wreak havoc on a household?
Thursday, August 12, 2010
Is a TIA Cat 7 standard on the horizon?
A source with connections to the Telecommunications Industry Association's TR-42 Engineering Committee says that sometime next year, the group may take up an issue it has long tabled - the development of specifications for Category 7 twisted-pair cabling systems.
Category 7 and Category 7A specs have been part of the ISO 11801 cabling specs, which are recognized as an international cabling standard whereas the TIA-568 series of standards serves North America. Apparently an effort by some members of TIA TR-42 would - and maybe will - have that organization adopt the ISO Cat 7 specs just about verbatim.
There are a few practical reasons why supporters of the effort would want the TIA to take on a Cat 7 standard. Several cabling manufacturers have been vocal in their support of using shielded twisted-pair cabling systems for high-speed applications such as 10GBase-T. Some of those same companies have begun to drum up interest in a "Base-T" version of 40-Gbit Ethernet. A Cat 7 spec would help that cause.
But also, a TIA Cat 7 spec will indicate to North American users of structured cabling systems that Category 6A is not the end of the line for twisted-pair cabling capabilities. That may increase users' willingness to purchase Cat 6A, knowing that twisted-pair cabling has a future beyond it. When the Cat 6A spec was finalized, cable suppliers saw a boost in their Cat 6 sales. The aforementioned suggestion that users were more willing to buy Cat 6 knowing their migration path could eventually continue to Cat 6A is one point to consider. Another is that with Cat 6A ratified and therefore viewed as a real standard by many, there likely was some hesitancy on the part of consultants to specify Cat 5e cable, which was then two generations behind the best-available twisted-pair technology. Likewise, if a Cat 7 spec comes to fruition, then Cat 6 cabling will be two steps rather than one step behind the best-available twisted-pair technology. With that in mind, I wouldn't be surprised if there's a decent level of support for Cat 7 within TIA sometime soon.
In terms of how or when such a proposal is made to TIA TR-42, I have to confess I could use a refresher on the procedural maneuvers. But from what I understand, if a proposal is made before there's adequate support and it gets squashed, supporters will have blown their one shot at the project. So right now, much like we hear about in Congress with bills under debate, there's some campaigning going on within TIA TR-42 to build support for a set of Category 7 specifications.
When anything official happens we'll be sure to let you know. And hopefully, we'll also be able to keep you up to date on what's unofficially happening, like we have here.
Category 7 and Category 7A specs have been part of the ISO 11801 cabling specs, which are recognized as an international cabling standard whereas the TIA-568 series of standards serves North America. Apparently an effort by some members of TIA TR-42 would - and maybe will - have that organization adopt the ISO Cat 7 specs just about verbatim.
There are a few practical reasons why supporters of the effort would want the TIA to take on a Cat 7 standard. Several cabling manufacturers have been vocal in their support of using shielded twisted-pair cabling systems for high-speed applications such as 10GBase-T. Some of those same companies have begun to drum up interest in a "Base-T" version of 40-Gbit Ethernet. A Cat 7 spec would help that cause.
But also, a TIA Cat 7 spec will indicate to North American users of structured cabling systems that Category 6A is not the end of the line for twisted-pair cabling capabilities. That may increase users' willingness to purchase Cat 6A, knowing that twisted-pair cabling has a future beyond it. When the Cat 6A spec was finalized, cable suppliers saw a boost in their Cat 6 sales. The aforementioned suggestion that users were more willing to buy Cat 6 knowing their migration path could eventually continue to Cat 6A is one point to consider. Another is that with Cat 6A ratified and therefore viewed as a real standard by many, there likely was some hesitancy on the part of consultants to specify Cat 5e cable, which was then two generations behind the best-available twisted-pair technology. Likewise, if a Cat 7 spec comes to fruition, then Cat 6 cabling will be two steps rather than one step behind the best-available twisted-pair technology. With that in mind, I wouldn't be surprised if there's a decent level of support for Cat 7 within TIA sometime soon.
In terms of how or when such a proposal is made to TIA TR-42, I have to confess I could use a refresher on the procedural maneuvers. But from what I understand, if a proposal is made before there's adequate support and it gets squashed, supporters will have blown their one shot at the project. So right now, much like we hear about in Congress with bills under debate, there's some campaigning going on within TIA TR-42 to build support for a set of Category 7 specifications.
When anything official happens we'll be sure to let you know. And hopefully, we'll also be able to keep you up to date on what's unofficially happening, like we have here.
Friday, August 6, 2010
Who cares what the CCCA thinks?
The Communications Cable and Connectivity Association (CCCA) is in the news again because of some recent actions taken by Underwriters Laboratories. As we have reported, UL issued an alert letting consumers know that Category 5e cable from Vertical Cable is not authorized to bear the UL mark, but does in fact bear the mark on its jacket. Soon after the report was issued, the CCCA applauded UL's actions to identify the cable in question; the association even explained it played a role in UL tightening up its quality-assurance procedures.
Every time I choose to publicize a CCCA action or statement, I hear about it. Not from members of the group or its executive director, but from people who firmly believe that the CCCA is an organization founded for the sole (or at least primary) purpose of furthering the cause of chemical manufacturers doing business in the cabling industry. Indeed, the CCCA counts among its members AlphaGary, Daikin America, Dupont, Dyneon, PolyOne and Solvay Solexis. Six of the twenty members listed on CCCA's Web site produce chemicals and materials that are used in the manufacture of cable and/or cabling components.
As I tell my children when they're trying to pull one over on me: I was born at night, but not last night. Do I think these companies joined the CCCA to figure out how they could get less of their products sold into the cable industry? Ummm, no. While the group itself is a "dot-org" meaning it is established as a not-for-profit organization, its members are in business for the same reason we all are: to make a profit.
Having been born not-as-recently-as-last-night, I also realize that companies' membership in any professional group or association is aimed at advancing their dollars-and-cents business. When I visit a company's home page and see one or more industry-association logos prominently displayed, I don't pretend the logo's presence is meant to bring the company's CEO a round of applause when she or he walks down the street. Nor is it there to improve a member of management's chances with St. Peter at the Pearly Gates. In most cases, such display of a logo has a twofold purpose, the elements of which are inextricable - to claim a measure of professional competence and to leverage that competence in the quest for new business opportunities.
Just in case I haven't already beaten this dead horse, let me summarize by saying that instances of altruism in situations like these are few and far between. If you know of some, please - I mean it - share them with me. For now, I'll charge on with this soliloquy.
Now that we (or at least I) accept that the CCCA is like other organizations and associations in that its members have business interests in mind, let's look at the rest of its membership. Two of the three major distributors serving the North American cabling market are CCCA members. Other members make up a pretty noteworthy pack of market-share front runners for cabling products. In short, CCCA membership represents a not-insignificant percentage of the cabling products and systems that are sold into the marketplace. For that reason, what the group says and what it does are newsworthy. When this collection of companies, representing the market share that it does, sets and carries out an agenda, its actions will affect the consultants, contractors, end users and all the other professionals who specify, recommend, purchase, install, and/or ultimately use cabling products. That the CCCA has an agenda is not a secret. The organization is nearly three years old and when I interviewed some of its founders in early 2008, they made it clear to me what they intended to do. And I tried to make the group's agenda clear to anyone who read about it in this article from an issue of Cabling Installation & Maintenance magazine published in 2008.
Here is an excerpt from that article.
The actions the CCCA has taken, including and notably its influence over UL's recent enforcement actions, are in line with those intentions and I, for one, was not surprised to see the news.
Now I know what happens next. I'll once again be characterized as carrying the CCCA's water. (No one's ever used that phrase with me actually. They've instead used more colorful language that describes the social hierarchy of maximum-security prisons.) And I know how defensive this sounds because I've tried many different ways to articulate it and they all sound the same. So I'll just say it like it is. I try to let professionals in the cabling industry know about the actions of the CCCA not because I'm in it to advance their cause. Rather, I believe the association can and does exert influence that can affect the purchase and use of cabling products and systems. That's a very practical concern for the aforementioned professionals who design, install and use cabling systems on a daily basis. They (You) should at least have the opportunity to know the direction in which the industry's market-share leaders are pushing the marketplace.
Every time I choose to publicize a CCCA action or statement, I hear about it. Not from members of the group or its executive director, but from people who firmly believe that the CCCA is an organization founded for the sole (or at least primary) purpose of furthering the cause of chemical manufacturers doing business in the cabling industry. Indeed, the CCCA counts among its members AlphaGary, Daikin America, Dupont, Dyneon, PolyOne and Solvay Solexis. Six of the twenty members listed on CCCA's Web site produce chemicals and materials that are used in the manufacture of cable and/or cabling components.
As I tell my children when they're trying to pull one over on me: I was born at night, but not last night. Do I think these companies joined the CCCA to figure out how they could get less of their products sold into the cable industry? Ummm, no. While the group itself is a "dot-org" meaning it is established as a not-for-profit organization, its members are in business for the same reason we all are: to make a profit.
Having been born not-as-recently-as-last-night, I also realize that companies' membership in any professional group or association is aimed at advancing their dollars-and-cents business. When I visit a company's home page and see one or more industry-association logos prominently displayed, I don't pretend the logo's presence is meant to bring the company's CEO a round of applause when she or he walks down the street. Nor is it there to improve a member of management's chances with St. Peter at the Pearly Gates. In most cases, such display of a logo has a twofold purpose, the elements of which are inextricable - to claim a measure of professional competence and to leverage that competence in the quest for new business opportunities.
Just in case I haven't already beaten this dead horse, let me summarize by saying that instances of altruism in situations like these are few and far between. If you know of some, please - I mean it - share them with me. For now, I'll charge on with this soliloquy.
Now that we (or at least I) accept that the CCCA is like other organizations and associations in that its members have business interests in mind, let's look at the rest of its membership. Two of the three major distributors serving the North American cabling market are CCCA members. Other members make up a pretty noteworthy pack of market-share front runners for cabling products. In short, CCCA membership represents a not-insignificant percentage of the cabling products and systems that are sold into the marketplace. For that reason, what the group says and what it does are newsworthy. When this collection of companies, representing the market share that it does, sets and carries out an agenda, its actions will affect the consultants, contractors, end users and all the other professionals who specify, recommend, purchase, install, and/or ultimately use cabling products. That the CCCA has an agenda is not a secret. The organization is nearly three years old and when I interviewed some of its founders in early 2008, they made it clear to me what they intended to do. And I tried to make the group's agenda clear to anyone who read about it in this article from an issue of Cabling Installation & Maintenance magazine published in 2008.
Here is an excerpt from that article.
Product-quality problems are not exclusively limited to counterfeiting, in which a rogue company uses the name and branding of a legitimate manufacturer. Anixter's [vice president of emerging technologies Pete] Lockhart describes another similarly vexing challenge that CCCA is taking on. "We're calling the project 'product certification,'" he says. "We want to separate the sub-par product that's being sold from that which is being sold for the good of the industry. The product is not counterfeit, but it is unethical."
Both Lockhart and [CommScope's executive vice president Randy] Crenshaw cited patch cords as an example of some substandard products entering the market with the same markings and packaging as legitimately performing products, leaving purchasers with little if any means of differentiating good from bad. Crenshaw adds, "The issue is trying to get a common set of expectations so the customer can reliably buy product and know it is what it should be."
CCCA executive director Frank Peri explains that the product-certification initiative seeks to weed out products that, "do not counterfeit a brand, but rather counterfeit quality." There is an intent to deceive, he says, and often the products carry the mark of an independent-verification house, even though the manufacturer knowingly puts into the product a material that would not meet the performance levels required to achieve that verification.
The actions the CCCA has taken, including and notably its influence over UL's recent enforcement actions, are in line with those intentions and I, for one, was not surprised to see the news.
Now I know what happens next. I'll once again be characterized as carrying the CCCA's water. (No one's ever used that phrase with me actually. They've instead used more colorful language that describes the social hierarchy of maximum-security prisons.) And I know how defensive this sounds because I've tried many different ways to articulate it and they all sound the same. So I'll just say it like it is. I try to let professionals in the cabling industry know about the actions of the CCCA not because I'm in it to advance their cause. Rather, I believe the association can and does exert influence that can affect the purchase and use of cabling products and systems. That's a very practical concern for the aforementioned professionals who design, install and use cabling systems on a daily basis. They (You) should at least have the opportunity to know the direction in which the industry's market-share leaders are pushing the marketplace.
Tuesday, August 3, 2010
The U.K. chainsaw cabling massacre
Bloomberg is reporting that over the course of a week, thieves in England used chainsaws to cut down as many as 14 utility poles, then stole the copper-based electrical wiring that the poles supported.
In the neighborhood of 7,000 customers lost power in the period between July 24 and July 31 because of the destruction.
Without witnesses, there's no saying whether or not the pole destruction went anything like this.
In its story, Bloomberg reported that copper prices climbed to a three-month high on August 2 after figures were released showing that U.S. construction spending experienced an unexpected 0.1-percent jump in June.
In the neighborhood of 7,000 customers lost power in the period between July 24 and July 31 because of the destruction.
Without witnesses, there's no saying whether or not the pole destruction went anything like this.
In its story, Bloomberg reported that copper prices climbed to a three-month high on August 2 after figures were released showing that U.S. construction spending experienced an unexpected 0.1-percent jump in June.
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