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.
Showing posts with label FEP. Show all posts
Showing posts with label FEP. Show all posts
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?
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