Unravelling Polymers

The Definitive Blog on Polymers by Poly Fluoro Ltd.

PTFE Pricing Update - The Impact of Anti-dumping Duties

For anyone connected to the PTFE industry, the last 18 months have been fraught with anxiety. The shutting down of a few PTFE resin manufacturers in China in early 2017 caused a supply crunch that has yet to ease out, driving prices up as much as 60%.

Many believed that the imbalance between demand and supply of PTFE raw materials would spur a capacity expansion from those manufacturers still operational. However – as we earlier saw in 2011 – resin manufacturers opted instead to maintain capacity and allow prices to increase. From the point of view of companies like Gujarat Fluorochemicals (India) and Shangdong Dongyue (China), this appears to be a sensible strategy. Until early 2017, the price of PTFE resins had been steadily declining due to fierce competition between resin suppliers. The shutting down of Chinese plants would have come as a blessing for these companies, who have since seen their realizations increase.

But while a rational observer may argue that an upward price correction was certainly due in early 2017, pinpointing the “fair” price for PTFE has always been tricky. Not only is the PTFE industry minuscule in comparison to more familiar polymers such as PVC, Polypropylene and Polyethylene, but its irreplaceable properties as an engineering plastic allows resin manufacturers a lot of leeway to test the extent to which higher prices would be accommodated by processors such as ourselves. Considering the price increase has been a worldwide phenomenon, it has not been impossible to convince clients regarding the upward revision of rates. What has been taxing, is the instability. A client may be willing to revise rates once or twice, but when it becomes a monthly affair, one can expect some backlash.

Amid all the uncertainty, it appears processors may have found some solace in the protectionist tendencies of the current US government. When the US announced in October 2017 that they would be reviewing the anti-dumping policy in relation to PTFE resin supplies, no one took much notice. This administration has highlighted multiple instances where the competitiveness of the US economy was threatened by low-cost-countries. We never believed that much attention would be paid to a niche industry like PTFE.

Over the past week, however, tariffs of 69% to 208% were announced on Chinese manufacturers, while Gujarat Fluorochemicals (India’s only manufacturer) was slapped with an 18.5% anti-dumping duty. The resulting impact of this measure is something we would like to extrapolate.

  1. Demand realignment

    The first and most obvious effect of a tariff such as this is to curb demand from the US for Indian and Chinese resins. Globally, North America is said to contribute to about 25% of PTFE demand, with the bulk of this coming from the US.

    Our understanding of the price of Chemours resins (the erstwhile DuPont and the company that has lobbied to get the anti-dumping duties imposed) is that they lie between 1.25-1.6 times the price of resins from India. Hence, even with freight and other duties, Indian suppliers may still find some takers in the US market. It should however be noted that given the superior quality of Chemours’ material, processors cannot be expected to choose Indian resins, should the price differential be small.

    With regards to China, the pricing is a little more opaque. There are several manufacturers, and each has their own rate contracts with their respective clients. Whether a 208% tariff is warranted or is merely the result of effective lobbying on the part of Chemours, we cannot really tell.

    In a twist of undeniable irony, Russian manufacturers have been omitted from this tariff. When Gujarat Fluorochemicals successfully lobbied for anti-dumping duties into India, they made it a point to include both China and Russia in their report. The absence of Russia from the US’ anti-dumping measures means that they are well poised to benefit from the demand shift – assuming the US does not penalize them with any other general trade tariffs.

  2. Supply realignment

    Considering what a large share of the world’s demand the US commands, their focus inward will leave a lot of Indian and Chinese resin manufacturers in the cold. The move is likely to cause the capacities of Asian firms to come in line (if not even exceed) local demand. There is still a significant amount of demand within Asia Pacific – which accounts for more than 50% of the global market. However, the price points are lower and the fact that the US has practically shut its doors mean that competition will drive prices down again.

    This may be particularly harsh for Indian resin manufacturers, as Chinese resins – which have been hard to come by locally due to the supply crunch – will undoubtedly flood the market. Interestingly, the anti-dumping duty on Russian resins into India has expired recently, implying that here too, they have a good opportunity to enter the market.

  3. Value realignment

    When India imposed anti-dumping duties on China and Russia back in 2010-2011, the effect was not as beneficial to Indian resin manufacturers as initially assumed. This was because processors shifted their demand from buying raw materials from China to buy semi-finished goods. Traders who were earlier importing resins, now began dealing in rods and sheets.

    It is therefore equally likely that in the US too, the market will shift such that semi-finished and finished components get imported, rather than resins. Ultimately, the US has a significant appetite, and this needs to be met one way or another. One cannot imagine a processor in the US agreeing to pay a 200% duty, when they can just as well import finished products with no such penalty.

    It should also be noted that while Chemours may certainly want to monopolize the North American market as it once did, it simply may not have the capacity to satisfy the local demand. As a result, shortages will push clients to look further up the value chain for their requirements. In protecting the interest of a few large companies, the US may have just killed of a large portion of its processing industry, which was no doubt dependent on Indian and Chinese resins for staying competitive.

PTFE (Teflon ®) Tubes as Insulators

The benefits of PTFE as an electrical insulator are well known. The high dielectric strength and breakdown voltage of PTFE allows it to be used in applications where standard insulation materials would fail.

In our experience, we have seen PTFE skived tapes used as wrapping around high-voltage junctions and circuits, PTFE components used as transducer covers and high-voltage casings and PTFE pads used to shield metal bodies from one another in electrical and thermal applications.

PTFE (Teflon®) tubes find similar uses as electrical insulators, although one really needs to dig deep to see where exactly they are used. Ever since we started manufacturing PTFE (Teflon®) Tubes, we have begun exploring its application and approaching various clients currently making insulation assemblies to understand whether there is a possibility to use PTFE in their products.

PTFE (Teflon®) Tubes in Cables

The requirement of cables to have a single outer casing that houses a variety of conductors necessitates the use of an insulating medium. PTFE tubes are used to shield each conductor from the next. In this application, it is essential that the tube is both flexible and free of any cracks/inclusions that would affect the insulating properties.

Additionally, since the requirement may be for a cable that is continuous and without joints, the PTFE tube would itself need to be continuous. It is therefore imperative to be able to manufacture a continuous tube that would be free from any defects for a length of at least 150 to 300 meters.

It has taken extensive research and multiple trials to attain a level of extrusion that guarantees a flawless, continuous length of tube.

PTFE Tube forms the insulating medium around the cable core

 

PTFE (Teflon) Tubes in Short Neutral Sections

While the tubes used inside cables are usually thin-walled tubes (within 1mm wall thickness), there are applications where thick-walled tubes form the outer casing of insulating assemblies.

The Short Neutral Section (SNS), is an insulating assembly used in overhead lines for the railways. Typically, the pantograph will run along a high-voltage wire above the train, allowing current to be supplied to the train. The current is drawn from a sub-station and when switching from one sub-station to the next, the pantograph will pass over the neutral section. The assembly ensures that the wires from two separate sub-stations do not make contact. Hence, it is important for the insulating medium to be effective. Furthermore, since the pantograph runs over the neutral section at high speed, it requires an insulator that is also capable of high wear resistance.

We were approached by the railways to develop this assembly. The core of the product is the thick-walled PTFE tube, which is combined with additives to improve wear resistance, while maintaining the dielectric properties.

PTFE Tube used as an outer sheath for electrical and wear properties

Conductive or Anti-Static PTFE Tube

Because PTFE has such a high resistance to current, there are areas where this becomes a problem. With no way to pass through PTFE, there is the possibility that excess static discharge simply collects on the surface of the material. Once a critical mass of discharge is reached, there is a high possibility of sparking.

In applications involving flammable vapours, such sparking can be very dangerous. To mitigate this issue, fillers such as carbon are added to PTFE to allow for some static discharge to take place through the material. The addition of carbon reduces the insulating properties of PTFE to some extent, but the end properties of the material are still far above any regular insulators.

 

There are multiple other uses for PTFE (Teflon®) Tubes across industries. As old designs are upgraded, it is important for product designers to keep in mind that PTFE has properties that make many of the older insulating materials obsolete.

 

Note: Teflon® in the registered trademark of Chemours™

PTFE Tube - End Properties and Characteristics

Our recent installation of a continuous line PTFE Paste Extruder has thrown up many findings. At each stage, we have needed to evaluate whether the finding impacts the properties of the final product. Given the fact that globally, There are very few PTFE tube manufacturers, our access to external information is limited. Thus, trial and error has been the key to fine tuning the extrusion process and derive a product of consistently good quality material PTFE.

Our journey in developing the product confirms that much of what is learnt needs to be kept proprietary, as it is part of a rich process technology not easily obtained. However, in doing so, we have also studied the final characteristics of PTFE tube and tried to make sense of what properties go in to define a tube of good quality that can withstand high temperature and pressure.

Properties of PTFE Tube

When clients approach us with enquiries for PTFE Tubing, they are primarily concerned with 3 factors. Each of these factors plays back into how the PTFE / Teflon tube of different sizes, is processed and has relevance to the end-application in questions

  1. Dimensional stability

    The outer and inner diameters of the tube (OD and ID) are of utmost importance. In almost all cases, the tube will be used in an assembly, where fittings have been designed to accommodate the tube in question. Although minor variations in dimension may be accommodated, the tube needs to adhere to the fitments used with it.We have observed that when high quality resins are used, the dimensional stability during extrusion is highly predictable and easily maintained within a tolerance of 50 microns (0.05mm). Certain Chinese resins, when extruded, do not maintain this integrity. So, a tube with a required OD of 6mm may sometimes measure at 5.9mm and at other times measure to 6.2mm, despite all other parameters remaining unchanged.

  2. Burst Pressure

    In applications involving high pressures, it is important that the tube does not yield during service.An easy formula to calculate the burst pressure is as follows:

    ptfe tube burst pressure

    There are two critical parameters here that define the effectiveness of the formula.

    The first is the tensile strength – which is denoted by “T”. In most cases, we are told to take a tensile strength of 25Mpa for this value. Our own testing indicates a tensile strength of 28-31Mpa on our tubes, meaning that the value of 25Mpa is safe to use. However, tube that is not properly processed can often have a tensile strength of less than 20Mpa. This means that while a manufacturer may use the value of 25Mpa for calculation, the actual burst pressure is at least 20% lower.

    The other factor – that does not even feature in this formula is the concentricity of the tube. Non-concentric tube will show a higher wall thickness on one side as compare to the other side. It will not have the same burst pressure of good quality tubes, even though the ID and OD may be the same. This issue also results in problems when we try and braid the PTFE Tube using stainless steel. The unevenness in wall thickness causes one side of the tube to collapse during braiding due to the pressure applied by the stainless steel.

    As a rule, we try and maintain a concentricity exceeding 95%.

    Calculating concentricity is quite simple. It is the ratio of the minimum wall thickness to the maximum wall thickness of the PTFE Tube. So a 6mm x 4mm tube, which has a wall thickness of 1mm, would need to have a tolerance of +/-0.025 to attain such a degree of concentricity.

    We have observed many tubes where the concentricity varies by up to 0.1mm on the wall thickness (implying a concentricity of only 81% on a 6mm x 4mm tube). While some applications may be fine with this level, it is up to the PTFE tube Suppliers / manufacturer to inform the client regarding the same, as the client may not always be aware of how critical this parameter is in the final application.

    Both concentricity and tensile strength are end properties derived from how the tube is processed during extrusion. Factors such as blending, extrusion pressure and sintering all lend themselves to arriving at a tensile strength acceptable by global standards. Similarly, extrusion speed, alignment and the blending process all play a part in ensuring concentricity exceeds 95%.

  3. Visual

    Good quality PTFE tube will have a smooth even surface without any pitting, waviness or discolouration. Visually, concentricity also plays a part, as a tube that is significantly off-centre will usually raise concerns from the client.We have already looked at how concentricity is influenced by the extrusion process. Similarly, factors such as quantity of extrusion aid, extrusion speed and pressure, finish on the die and sintering temperatures all weigh in on how the tube appears. Invariably, visual factors such as pitting, waviness and discolouration will give clues as to the fundamental properties such as tensile strength, elongation and dielectric strength. Hence, these need to be evaluated not just from a cosmetic point of view, but also in terms of what characteristics of the final product are being diminished due to the appearance of visual indicators.

It should be noted that the above characteristics cover only the very basic aspects of PTFE tubing. Products such as anti-static tubing, ePTFE tubing and convoluted tubing will each bring a new set of challenges that will need to be studied from first principles.

For the time being, we are satisfied to have attained global quality standards on characteristics that drive a majority of the demand for PTFE tubes.