- There is a general slowdown in global demand (much in line with most other industries) that makes it risky for resin manufactures to experiment with pricing like was done early in the price escalation of 2010-11
- There was a significant over supply of resins when prices were high and this led to huge inventories which manufacturers are still offloading
- The government support has reduced for PTFE
resin manufacturers in China. With the clamping down of R22 within China (for
environmental reasons), there is a subsidy of US$0.5 per Kg of R22, which is no
longer being offered by the Chinese government. Owing to this, Chinese manufacturers have had to pass on this
cost increase of about US$2 per Kg on to PTFE processors.
- Due to quality issues with Chinese resins, many
OEMs have started specifying that their parts be made from resins such as
DuPont, Daikin or AGC. Many semi-finished PTFE processors have also shifted
away from Chinese resins due to the instability of the material. It was long
believed that China reserved the good quality resin for their domestic
manufacture and preferred to dump the off spec grades into other countries (one
of the reasons why the anti-dumping duty on Chinese resins was upheld by the
Indian government). This has hit the volumes of Chinese resin manufacturers
- Another key issue is repro material. While India earlier had significant imports of Chinese semi-finished PTFE materials, most of this was repro material but was being passed off as 100% pure virgin PTFE in the local market. This high intake of semi-finished PTFE was affecting the local semi-finished manufacturers as well as local resin suppliers. However – owing to the major quality issues with repro and the lack of accountability and transparency in the percentage of repro being incorporated, many companies have had to stop procuring semi-finished PTFE from China and have started buying domestically – where it is easier to monitor quality and also return material if found defective. This has led to a resurgence in domestic PTFE semi-finished goods production and also an increased off-take from local resin manufacturers.