Dear Valued Lanmar Customer,
Come April 1, 2011 a substantial industry-wide pricing increase on all PTFE products will take place. It will impact everyone who has anything to do with PTFE; manufacturers, distributors, converters, fabricators, and end users. It is a “perfect storm” of supply vs. demand and involves the basic raw material ingredients that are used to manufacture PTFE resin.
The major manufacturers whose quality products we market have told us to expect price increases of between 10% and 20% on PTFE Tapes, PTFE Coated Fabrics, and custom PTFE Belting products. Items featuring heavier PTFE coatings will be increased the most. Manufacturer’s themselves are facing raw materials increases from 25% to 35%. These increases are unprecedented and incredible to comprehend. Historically, past increases have been in the 4%-6% range coming at 2-3 year intervals. We are now told that these high prices will last and that there is no end in sight for the material shortages causing this pricing calamity.
We can lay some blame on the unrest now taking place in many of the Mideast oil producing countries for the increased cost of the energy resources used to manufacture PTFE. But the primary issue here is the current availability of a key PTFE ingredient called Fluorspar (aka: fluorite, calcium fluoride, CaF2). Fluorspar is critical in the manufacture and production of fluoropolymers, pharmceuticals, hydrofluoric acid, refrigerants, steel, aluminum, glass, ceramic materials, enriched uranium, hydrofluoric acid, a variety of fluorochemicals, including fluorocarbon plastics (PTFE), solvents, refrigerants, aerosol propellants, and any other product that requires a fluorine-based stock.
China controls 70% of the worldwide fluorspar production capacity and they have restricted exports. The booming Chinese economy is the culprit. For years China freely exported their raw mined minerals to the USA and other countries. Now, these products have Chinese domestic use priorities. Chinese manufacturers are now producing many of their products for internal consumption with the leftover balance targeted for high-tariff exportation, which includes raw materials such as fluorspar. Countries, including the USA, are now scrambling to reopen old or open new mining resources of this critical mineral. The base mineral, fluorite, is found in large deposits in many areas including China, Germany, Austria, Switzerland, England, Norway, Mexico, and in the Provinces of Ontario, Newfoundland and Labrador in Canada. Large deposits also occur in Kenya, and in areas within the Great Rift Valley of Africa. USA deposits are found in Missouri, Oklahoma, Illinois, Kentucky, Colorado, New Mexico, Arizona, Ohio, New Hampshire, New York, Alaska, and Texas. Fluorite has been the state mineral of Illinois since 1965. At that time, Illinois was the largest producer of fluorite in the United States, but the last fluorite mine in Illinois was closed in 1995.
Add this information to a worldwide increase in demand for PTFE resin coming from a small number of PTFE resin producers, DuPont being primary among those producers in the USA, and we have a pricing situation that is, sadly, unavoidable and seemingly out of control. The European Union (EU) has declared fluorspar to be on its worldwide shortage list until at least 2030.
It would be advisable for you to try to get a jump on this price increase by placing your orders now in advance of the eventuality that our in-house inventory will turn over and be replaced with higher priced goods. We expect that by early summer all PTFE products in the pipeline will reflect significantly higher prices, not only from Lanmar, but from every manufacturer and distribution source of these technical products.
Please understand that everyone who makes, sells, converts or uses PTFE products of any kind is in the same boat. Customer anger from this situation is certain. In a few weeks there will be no place to go for “better pricing” as everyone will have to face this unwelcome situation. Lanmar will keep our customer base up to date on this pricing instability. We have now introduced a new Lanmar website which has this blog page for posting relevant industry information and Lanmar product updates. Please check this page regularly for items of interest.
Thank you for your patience and understanding while we move through this crisis in search of some hopeful price stability in the future. Please contact Lanmar with your concerns, questions and comments. We at Lanmar appreciate your business and deeply regret having to convey this pricing crisis at a time when the economic climate is so fragile.
Please contact us at: ptfe@lanmarinc.com
Sincerely,
Martin J. Jacobs
President/CEO
LANMAR INC.