Over these past two years, virtually no supply chain in the world has been immune to the vagaries of price fluctuations. The initial onset of the pandemic did not immediately result in inflationary pressures. This was possibly a combination of caution on the side of the suppliers of raw materials combined with the uncertainty that demand would persist across industries. However, once the dust somewhat settled, it became obvious that demand was still robust. Not only that, the general climate since 2021 has been one of exuberance, with the result that prices of PTFE have experienced a steady uptick month-on-month.

It should be noted that while PTFE prices have seen an upswing of anywhere between 25-40%, price escalations for other polymers have been even more pronounced. For POM (Polyacetal), for example, the price moved from a low of ~US$1.75 in 2019 to ~US$4.35 today – as staggering 2.5X increase. Other plastics such as ABS, Polypropylene, and PVC have seen similar jumps, if not as pronounced.

Today, while price revisions continue to be sprung at the beginning of each month, it is probably wise to take stock of the pricing pressures presently at play and understand how the next 12 months might look. Broadly, there are four levers impacting the climate of PTFE pricing.

1. The war in Ukraine

Perhaps the most significant event over the last six months, the war has had multiple ripple effects across various economies and industries. If we look at the impact on PTFE, the effects are threefold:

1. PTFE resins from Russia are well accepted and widely regarded as being of good quality. However, the war has forced many European nations from cutting ties with Russia and the subsequent shortage of Russian resins has put pricing pressures on PTFE raw materials.

2. The resulting hike in oil prices pushed up the costs of shipping, forcing many processors to buy locally. This has put tremendous pressure on resin manufacturers. In India, Gujarat Fluorochemicals – who have monopoly on indigenous manufacture – have been operating at capacity. Orders that would otherwise have been available ex-stock now take 3-4 weeks to be dispatched. At the same time, MOQs have increased, as the focus shifts to pushing out as much of a given grade as possible before moving to another grade.
   (It should be noted that PTFE does not directly get impacted by oil prices. Many clients assume that as it is a polymer, its fate is somehow linked to oil. However, PTFE is made via an entirely different process and as such does not get impacted when oil prices fluctuate).

3. The energy crisis created by the war in Ukraine – both for oil and natural gas – has caused steep escalations to the cost of production in Europe. This has, in-turn, made the manufacture of PTFE resins very costly and even with the higher shipping costs, it has made sense for them to import materials from India and China. This added displacement in demand has put the bulk of the pressure for supply on Indian and Chinese manufacturers, pushing prices up as a result.

2. Capacity expansion

COVID ensured that any major additions of capacity would need to be put on hold. However, the subsequent spurt in demand found many raw material suppliers struggling to meet their target timelines. Since 2021, the addition of capacity within China has seen many resin manufacturers step out and start re-building their dealer bases in India.

In India, the entry of SRF into the PTFE resin space remains a very significant event. While initial reports suggested they would be production ready Q3 2022, the present status seems to indicate that they may hit the market only by Q1 2023. Either way, the resulting jump in capacity will bring some much-needed competition into the local market and ease off some of the pricing pressures currently being seen.

3. China lockdown

As China pursues an aggressive lockdown policy, the supplies to other countries have been sporadic. Since China remains the largest manufacturer of PTFE resins, this supply inconsistency has caused supply-side ripples across the market. Further, with Russia out of the picture, it has become even more imperative for China to maintain a steady supply into Europe. As COVID pressures ease, we should see some improvement in the flow of materials out of China, which should subsequently relax pricing.

4. The end of anti-dumping duties

Over the past decade, the Indian market has been protected by the prevalence of anti-dumping duties on Russian and Chinese resins. This duty – a fixed amount per Kg that typically implied a price increase in the range of 18-25% - has forced most processors in India to buy only from Gujarat Fluorochemicals. As the present scenario unfolds and demand from Europe spikes, GFL’s grip on the Indian market has become even more pronounced.

However, a July 2022 ruling by the DGFT has abolished anti-dumping duties, leaving the Indian markets open to resin from both China and Russia (India continues to buy from Russia). This move is likely to see a much-needed easing of PTFE prices in months to come.

In conclusion, while PTFE supply-side pressures remain strained in the short-term, the medium to long term effects point to a general easing of pricing. Whether prices will return to their pre-COVD levels seems unlikely. However, the added capacities and competition from China and Russia will certainly keep price escalations in check, even as energy prices remain uncertain.

---

Read More

1. An overview of key high performance plastics

2. Polymer Sealing Solutions – High Performance Seals, Valves, and Seats 

3. High Performance Polymers in Railway Applications

The polymer landscape is constantly evolving. Even as new methods of production and processing are developed around existing polymers, there exists and ever-expanding field of new-age polymers, many of which will be mainstays of the industry in the years to come. Some of the key niche polymers are listed below. While a few – such as PTFE, PVDF, and even PEEK – are relatively well know, many are yet obscure, with their properties not fully explored or understood. It is imperative that engineers understand these properties and find ways to incorporate these polymers into their future designs.

---

Read More

1. High Performance Polymers in Railway Applications

2. Polymer Sealing Solutions – High Performance Seals, Valves, and Seats

3. Polymer Wear Plates - Grade Selection and Key Advantages

 

Some years ago, we were approached by the Indian Railways as part of the Make in India initiative. As an RDSO approved manufacturer of PTFE bearings, our name had come up as a potential vendor for the indigenisation of a high value imported insulation assembly.

We were asked to visit Kuppam Railway Station (about three hours from Bangalore) and meet with technical personnel. There, we were shown an inconspicuous looking installation, perched far above within the high-tension electrical cables that supply the trains with power. A spare assembly was shown to us at ground level, and we were asked whether we could manufacture the same thing in India.

The short neutral section, as it is known, serves a very important purpose in ensuring that power is delivered to the trains without disruption. Power to overhead electrical lines are provided by substations. These substations are often located at intervals of about 100Km along railway lines. It is also likely that their phases are different and hence essential that their currents are kept insulated from each other. Short neutral sections are insulating members that connect the lines between two sub-stations. The pantographs feeding off the overhead wires for current will pass over the neutral section in order to switch from one substation’s power to the next.

The short neutral section – or SNS – is comprised of 4 different insulating elements made with PTFE based compounds. These are mounted on insulating rods and supported mechanically with copper conductors and stainless-steel fasteners. 

The assembly is required to be mechanically strong (the tension in the overhead wires can be significant), electrically resistant, and capable of taking high wear loads, as the pantographs will repeatedly rub over the PTFE elements, causing a gradual wearing off. As a result, the PTFE elements need to be rotated once in every 2-3 months and have a life of only about 15-18 months in total. 
The issue the railways was facing was the following:

1. The SNS assemblies were being imported from Germany at a very high cost

2. The nature of the design meant that once the PTFE insulators wore off, the entire assembly needed to be replaced

3. Maintenance and repairs were expensive

4. With the growing need for electrification, the railways needed a more cost-effective solution for the SNS assemblies

At Poly Fluoro, our experience with large-walled PTFE tubes and with mechanical assemblies meant that we were able to reverse engineer the arrangement. We had already developed thick-walled PTFE tubes for the use in railway pantographs, so this was an extension of an already successful project for us. However, while our existing tubes were only being used for pneumatic and electrical applications, the SNS would also experience significant mechanical loads. 

Care needed to be taken to ensure that we were replicating the original material with PTFE compounds of equal or better performance. We extruded 7-8 different formulations of PTFE until we found one that worked best.

One of the other key elements was the crimping of SS collars to the insulator rods. The assembly would experience tensions in excess of 10 tonnes, so the crimping needed to be strong enough to withstand this over the long term.

Finally, the design was also altered to allow for only the insulators to be replaced. The copper and other steel elements experience nearly no wear and tear during the course of the 18 months, so expecting that the whole assembly should be replaced when the PTFE wore out was needlessly expensive. With a new coupling arrangement, railway maintenance could replace only the PTFE elements, leading to a lower down time and far lower costs.

Even after construction, the SNS assembly needs to go through significant rounds of testing at CPRI before it is ready for field action. Poly Fluoro extensively tests its materials in house, so that the risk of any failure either on the field or in a third-party lab is minimal.

Using only the finest quality resins and state-of-the-art processing equipment and techniques, Poly Fluoro is on its way to be an integral part of the Make in India initiative, as well as India’s own growth and development story.

---

Read More

1. Case Study - Expanded PTFE (ePTFE) Tubing

2. Case Study - Cross Directional Expanded PTFE Gasket Tape