The world of commodity goods and services may seem static to outside observers, but behind the curtain there is almost always a seething churn of battles occuring between competitors and with vendors. In the high volume, low margin world of commodity polymer manufacture, the price of resin (or “plastic”) feedstocks is subject to the variability of the global hydrocarbon market. The market determines your price and your costs. The trick is to avoid getting squeezed when unit costs and prices converge.
In the resin film and injection molding business, the ability to raise prices is constrained by the complex relationship between the manufacturer of polymer resins and the buying side of the market. The relationship between thermoplastic polymer (i.e., PE, PP, PS) manufacturers and the end user is not always direct.
The actual manufacturers of thermoplastic polymers produce their resin product in the form of squat little beads. There are several reasons for this. Beads are what you get when you cut extruded spaghetti noodles from the output side of the polymer reactor. This cutting process happens in a stream of water to remove process heat. The water rapidly cools the resin and prevents the beads from agglomerating. It also provides a means of conveyance to move the beads elsewhere in the processing facility.
The beads are removed from the water and subsequently moved to silos by pneumatic conveyance. Beads have the happy property of flowability. You can pour beads into a properly designed hopper and they will flow by gravity into a rail car or an extruder.
There is an intermediary customer called the converter. The converter buys resin beads from a manufacturer or distributor and converts them into higher value forms. Converters make films and injection molded items from these resin beads. Converters practice a high art. Some of their products, like films, may be pure resin. But a great many other products in the injection molding arena are highly modified with additives that provide desired attributes in the molding process itself or in the finished good. Additives are the output of a highly specialized industry.
Because the polymer market is very competitive, it is difficult for any given producer or converter to simply raise their prices. One of the tricks of the trade is something called “down gauging”. It is simple to understand. To improve manufacturing economics, converters will make their films thinner (in resonse to marketers of films) so as to make more sq meters of film with the same material input. The reader may have noticed that over time, plastic bags or wrappers have gotten much thinner. This is the result of down gauging.
Converters have to face material limitations in their resin feedstocks. For films, melt strength is one of the key parameters in processability and a big selling point for manufacturers of resin feedstocks. When you make a blown polymer film, your are actually extruding molten resin through an annular die to form a cylindrical bubble. The bubble rapidly cools to form a continuous tube of film that is then rolled as is, or slit to form a continuous sheet. This is a very common technique for making commodity films. If the molten bubble is not strong enough to withstand the effects of gravity and processing forces, it will collapse and fail.
One of the improvements to come along beginning in the early 1990’s is the availability of metallocene polymers, specifically mPE. This technology provides for greater control over the molecular structure of the polymer and subsequently, greater control of the rheology of polymer melts. Improvements in melt strength can lead to greater processing controllability for the converter and more options in gauge.
If you want to understand the PE and PP industry, you have to understand the relationship between resin manufacturers and converters. While converters do not drive the boat exclusively, they do have a large input into which direction the boat is pointed.
Lamentations on Chemistry 
My first professional job was at Hercules, who at that point in time still made PP film. They had a plant outside of Montreal where one company (I can’t remember the name) processed/purified the propylene, sent it over the barbed wire fence to Himont, who polyermized the propylene and then sent if over the barbed wire fence to Hercules who made tentered film with it.(blown film is for wimps: real men use a tenter!)
I don’t know what a tenter is? Can you ‘splain it? These days I would only make a polymer as the result of a terrible misunderstanding.
Tenters are a much more logical process for making film. Bubbles are incredibly cool to watch, but you still have to wonder about the guy who thought the process up – and convinced his boss to buy in on the dream.
The tenter process is a two-step process. First a flat thick sheet of PP is extruded and cooled. Then passes over a series of rolls which reheat it. After a number of rolls, the roll speed suddenly increases, stretching the sheet in the down-machine direction. This then is fed into the tenter oven. On both sides of the oven, there are clamps which move along a track at the same speed as the film, with the distance between the clamp-tracks increasing as you move further down the machine. So, when the previously stretched film is fed into the oven, the clamps grab the edges and stretch it in the cross-direction. For PP, the stretching in the machine direction is about 5x, and 10x in the cross direction. Blown film is 7x in both directions. Tensile properties of the tenter film in the two directions are consequently different, while they are the same in blown film.
For reasons unknown, the word is pronouced without the second “t” – like “tenner”, or maybe the second “t” is subtle, as if the French were saying it. Pronunctiation is not my thing. France would ban me as an enemy of the state if I were to ever set foot in it and speak French.
My first (of countless) professional embarrassments occured in the tenter oven in Terre Haute. (Besides livng in Terre Haute) All of the hot air in the oven was vented before the end of the over- there were still 2 zones were the temperature was only ~ 80 F or so. My boss and I were the only Ph.D.’s located at that plant, and we were both in that end of the oven looking at something when the door closed behind us. It was shut good and tight , kicking it nothing to open it. After about a minute of kicking, another engineer came along, opened the door, saw us and said “How many Ph.D.’s does it take to lock themselves in an oven?” By the time my supervisor and I had walked back across the plant to our offices, this guy had already broadcasted on the P.A. for both subplants what had happened. I think I’ll go home now.
Great article and great stories!
Hi John: Thanks for the explanation of a tenter. I have never seen one of these machines. My work is way upstream of extruding and film processing.
Plant guys like nothing more than to watch the eggheads goof up.
“Plant guys like nothing more than to watch the eggheads goof up.” And vice versa. We were in the plant because they were having immense problems making one of their largest running products. They came within 6 hours of shutting down a marquee customer – one pretty much everyone in the world has heard of. They would make a roll of film, and immediately truck it to the customer.
It was not a pretty picture. People were fired with prejudice. The customer set up a second supplier, and eventually switched to them entirely. Within a few years, Hercules sold off the division entirely. (I had already jumped ship on my own.)
As I tell everyone, the year I spent in Terre Haute was the worst decade of my life, and I was not alone in that opinion. Timothy McVeigh, the Oklahoma City bomber agreed. While he was on death row, he was filing a whole range of appeals as they moved him from prison to prison. THEN they moved him to the Fed Prison in Terre Haute. All the appeals immediately stopped – apparently death was more appealing than life in Terre Haute.
It’s amazing how things can spiral out of control. Companies can loose their skill in their art. It can happen. If they don’t lose the technology skills, management skills can drift.
I’ve never been to Terra Haute. But I did do one year in South Bend.
“over time the price of everything rises.”
Prove that. You can’t say such things without substantiation. So the value of a dollar rises over time?? You haven’t thought this through. Can you differentiate price from value? Do you even know what value means?
—being a wise ass but you’re floundering
“Can you differentiate price from value? Do you even know what value means?”
I don’t interpret this as a question- \;-)
One of the perils of blogging is that it seductively supports the publication of first drafts oh-so-smoothly. And, there are no editors to hassle you about fact checking. There are just commentors who glide through the cyber mists to point out your errors.
Thank you for taking me to task. My intent was in using that opening sentence as a rhetorical entry point rather than as an axiom. You’re right, it is technically incorrect. I was thinking about how the cost of doing business always seems to rise and how cost pressures are behind down gauging.
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