Coatings World - October 2011

in-plant training of paint-line operators through its Knowledge College service in coating application technologies.

Jotun and Emirates Green Build-
ing Council host networking
event on ‘Paints and Building
Sustainability’
Jotun Paints and the Emirates Green
Building Council (Emirates GBC), an or-
ganization aimed at conserving the envi-
ronment by strengthening and promoting
green building practices in the UAE,
jointly hosted a networking event on
‘Paints and Building Sustainibility’ on Sep-
tember 27, 2011, at the Novotel Hotel,
Dubai. Jotun Paints is a key corporate
member of Emirates GBC, and this joint
initiative was part of the paint company’s
continued call to the Middle East region’s
construction segment to adopt more
‘green’ building policies. The networking
event included the participation of key
stakeholders in the construction industry
such as consultants, developers, architects,
interior designers and contractors.

Fluoropolymer Pricing Trends –
An Unprecedented Situation

By Mike Haley, Whitford Corporation Prior to the pricing mania that exists today, the last big party for fluoropolymers occurred in the late 1990s when demand was growing and pricing was firm in the years leading up to Y2K. However, in the first decade of new millennium, three major shocks hit the industry. First was a rush of new entrants and associated capacity expansions in Asia Pacific; second was the punishing recession that followed the events of September 11, 2001; and third was the devastating impact of the Great Recession of 2008-2009. For much of the decade, prices and volumes of fluoropolymers remained depressed.

Driven by concerns that supply will remain tight, customers are restocking (and in some cases overstocking) the value chains. Some customers are placing double orders with different suppliers. Meanwhile, economic times seem almost too good to be true given the short elapsed time since the economic calamity. Could it be the industry is simply awash in cash—a short-term beneficiary of bank bailouts, deficit spending, QE1, QE2, and counting? Let’s cross our fingers and hope all of this is not tantamount to putting out a fire with gasoline.

In the past year we have experienced an unprecedented situation in the history of fluoropolymers. Despite the proliferation of new resin suppliers, prices of many grades have more than doubled from historical levels. Price tags are up to three times higher than just a couple of years ago and resin suppliers are taking advantage of the situation.

Certain parts of the fluoropolymers industry have been somewhat cyclic for many years—similar in some ways to polyolefins—where double digit price increases are followed inevitably by double digit decreases. The twin realities of cash availability within the large, publicly-traded companies that produce these materials and the long lag time between an investment decision and its fruition often result in overinvesting at the tops of economic cycles and underinvesting at the bottoms. But what we are now experiencing is tremendous cycli-cality—the amplitude of the cycle is simply unprecedented.

Fluoropolymer prices are poised for a correction when supply again exceeds demand. In the meantime, deselection of fluoropolymers is likely to result from extreme price volatility as well as the imbalance of supply and demand that accompanies it. On the other hand, stable prices will encourage the continued selection of high-function products made from fluoropolymers. Although it may take some time, let’s hope fluoropolymer prices will soon achieve a modicum of stability.

About the author

Mike Haley has held a variety of positions in the fluoropolymer industry for more than 20 years. Currently industry manager with Whitford for the past three years, Haley is also a member of the Board of Directors of SPI – The Plastics Industry Trade Association. Whitford is a leading producer of fluoropolymer-based coatings used in a diverse range of end-use applications from non-stick cookware to corrosion-resistant bolts for off-shore oil platforms. With manufacturing operations in seven countries, Whitford purchases several thousand metric tons of fluoropolymers, such as PTFE, annually for use as raw materials in coating formulations. Having started in the coatings business in the 1960s when fluoropolymers were also in their infancy, Whitford has been part the fluoropolymers industry for more than four decades.