As we go to press, 3Q 98 is history and its economic impact is also one for the history books. We are now staring at the big "D", meaning a deflationary period for plastics prices. As an example polyolefin prices slipped further and were at their lowest levels in years. The same is true of polypropylene, styrene and PVC. All of the volume resins are affected by the increase in supply due to the lower demand from Asia.
It all started with rampant speculation in developing nations fueled by excessive foreign investment, including money from the U.S. Now there are fewer buyers for our products. Lower demand leads to lowering of prices. Thus we see pricing, even adjusted for inflation, at the lowest level in a decade. Look at some catalogs from the 70s and compare prices on sheet and rod products for acrylics, polycarbonates, nylon, acetal, PVC, polyolefin, and styrenes with today's prices. You'll be amazed -- and this is before the current deflationary spiral that is just starting.
Where is this leading? The prudent decision is to keep inventories low and to time purchases to coincide with a rise in prices. Unfortunately, this is as scientific as the stock market. Best guess is for prices to rebound after the November elections. Look for IQ 99 as a signal to buy for stock again. These are indeed historic times for our industry.
l Speaking of historic times -- let's look at some more millenium monomers. Herewith a new touch sensitive plastic panel for use in lightweight portable computer screens for data input. It's developed in Japan by Gunze Ltd. Its light transmission rate is 84.5% compared to 82.2% in highest quality glass touch sensitive panels with, our course, corresponding weight savings.
l Global marketplace for high temperature plastics is expected to grow to $4 billion by 2007. This compared to $330 million in 1997! These are products that cost over $9.00/lb. on average and consist of Fluoropolymers, Polyetherimides, LCPs, PPSs, PEEKs, PBIs and other materials with heat deflection temperatures of at least 200C.
l Sumitomo Metal will use waste plastics as a reducer for producing iron from iron ore by the year 2000. This is an effort to cut CO2 emissions.
This will be done by removing chlorine from vinyl chloride in waste plastics. The paths of plastics and metals continue to cross and merge as we move ahead to an era where plastics become the most widely used material moving ahead of wood and paper and intersecting with metals.
Less than 500 days to the new millenium and its millenium monomers!
Melvin (Mel) W. Ettenson of Ain Plastics of Michigan, Inc., B.S., Engineering, Lowell Technological Institute; M.B.A., NYU.; Lt. Comman-der, U.S. Navy; Owens Corning Fiberglas Corp., Mktg. Research Director; Uniglass Industries, Regional Sales Manager ; Dayco Corp., Sr. V.P. Cadillac Plastics Division; Member of the Society of Plastics Engineers, and The Society of the Plastics Industry. 810-356-4000.
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