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PENDING CHINA TARIFFS HAVING A CHILLING EFFECT ON SPOT PE PRICES ON RESINS FOR PLASTIC Molding Manufacturers and Companies
FIRST, LET’S REVIEW THE Plastic Molding Processes
Plastic processes differ greatly in both the way they form plastic products and in the shape and structural integrity of the products they manufacture. Plastic molding processes vary greatly in cost. High end plastic molding processes, such as rotational molding and injection molding, provide precision three dimensional plastic parts with structural integrity and impact resistance few other processes or materials can provide. On the other end of the spectrum, rotomolding, vacuum forming, blow molding and dip molding processes offer very affordable options for long runs and mass production of containers and household commodity items. A wide range of plastic materials are molded through these processes, although some processes are more effective with certain polymers than others.
Injection Molded Plastics
This is one of the most common forms of plastic molding, and the process can range widely in cost, depending on the complexity of the part being molded and the materials which are used. Injection molding produces three dimensional, solid parts with mid to high strength and is unique in plastic molding processes, as it can produce relatively complex shapes. Advanced injection molding techniques include insert molding and reaction injection molding (RIM); insert molding dies contain a solid object, such as an electric coil, around which the molten plastic is injected, creating an encapsulated object. Reaction injection molding combines a liquid resin thermoset polymer (typically polyurethane) with liquid polyisocyanate, which acts as a reagent within the mold, causing the polymers to expand and form bubbles (either open or closed cell foam), filling the mold.
Plastic extrusions are formed similarly to the way injection molded plastics are formed, although extrusions are formed through an open die. Plastic resins such as PVC, acrylic, polypropylene or ABS are fed through a hopper into the extruding barrel, which shears and melts the resin, pushing it through the open die to form a profile or shape. This profile is immediately immersed in cold water to set the plastic; the profile is extruded continuously, passing through the die, through cold water tanks and onto a sawing table, where pre-specified lengths are cut. Most common products are plastic tubing / and plastic tanks.
Plastic Blow Molding
Numerous products are made from blow molding. Any consumer item that has a three-dimensional shape and is hollow, such as and plastic tanks and CD and carrying cases, is manufactured using the blow molding process. Blow molded products are capable of holding a variety of substances such as herbicides, pesticides, cosmetics, and automotive oil. The plastic utilized for these processes are all thermoplastic resins. They include acetal, polysulfone, polyamide, polystyrene, butadiene styrene, Barex, polyvinyl chrloride (PVC), and high and low density polycarbonate.
Dip molding plastic is one of the simplest means of molding plastic and, like blow molding, is capable of producing a large number of parts or products at low cost. The dip molding process serves in one of two manufacturing capacities: to create whole flexible or rigid products such as rubber gloves, condoms and plastic caps; or to coat pre-manufactured products such as wire racks, wire cable and plastic coated handles.
Polyurethane is a material that is valued for its uses in “memory foam” products due to its flexibility and rigidity. Polyurethane is also a valuable material for products such as solid plastic forms, polyurethane rods, urethane wheels, urethane brushings, and urethane sheets. Urethane rolls is another common product with American Urethane being a leader. Polyurethane moldings have an excellent reputation for their high performance. Their longevity is greater than that of plastic, and are more impact-resistant than rubber. It also has elastic memory, reduces noise, and is resistant to heat and chemicals. It possesses many of the good qualities of metal, rubber, and plastics, and is capable of forming strong adhesive bonds with most plastics and metals.
Rotational plastic molding is capable of achieving plastic parts with more strength and structural complexity than any other plastic molding processes. Unlike other plastic molding methods, rotational molding produces a relatively low volume of parts in what are typically short runs, due to the amount of time and equipment required for rotational molding. Rotationally molded plastics may not be mass produced like blow molded, dip molded or thermoformed parts, and this process is typically reserved for complex or high-performance parts such as plastic figurines and military-spec rackmount carrying cases.
Vacuum formed plastics are used as faceplates and semi-flat components in a wide range of industries, particularly in electronic equipment such as fax machines, keyboards, phones and home appliances. Also known as thermoforming, or pressure forming, the vacuum forming process begins with stock plastic sheets rather than polymer resin pellets; these sheets are heated until the polymer reaches a flexible temperature, then they are vacuumed into an open mold, causing the heated sheets to “thermoform” to the exact shape of the die mold beneath. Twin sheet thermoforming is commonly used to create large and precision application parts such as hot tubs and interior wall panels for aerospace, but thermoforming is also a highly cost-effective means of producing three-dimensional plastic packaging. Blister packs, clamshells, plastic covers, plastic trays and other plastic packaging can be produced for low costs at high runs by vacuum forming.
In the creation of fiberglass-reinforced plastic products, fiberglass molding is the most frequently used process. Fiberglass is made when molten glass is extruded through very fine openings in a tool. This extrusion process produces threadlike formations in the glass that are later put through heat treatment or pressing and mixed with plastic resin.
Obviously, the plastic molding industry is a large segment of our economy and consumers and suppliers will be affected by the increases in cost from these tariffs.
Trade War with China will hit OEM manufacturers first
As trade relations between China and the United States deteriorate, OEM manufacturers and their metal suppliers are caught in the middle.
Who is affected first?
Jim Netti from Metalmen Sales says “when the possibility of tariffs were announced, many buyers, concerned about the security of their supply chain and motivated by the desire to purchase at pre-tariff prices, rushed to place orders for the existing inventory. And price in effect (P.I.E.) clauses were put into place lending an air of discomfort.
As a result, there are many manufacturers who are unable to source for production, or must wait long lead times, or must pay premiums.”
Metals such as stainless steel, nickel, copper, aluminum, tungsten, titanium come in many different forms. Typically when referring to industrial metals, suppliers will include a number of products like bars, foils, plates, rods, sheets, rolls, strips, wires and various other forms like aluminum extrusions, wire cloth and stainless steel tubing. Suppliers frequently offer customized solutions as many types of metals can be manipulated to fit particular specifications. Many steel service centers will first feel the effects of the tariffs.
What segments of the OEM market will bear the brunt of the price increase and the resulting revamping of resources?
Metal industries affected
Metal Forming industries affected
Grey Iron Castings
The far reaching impact to the OEM market will be significant in regards to pricing and inflation, supply shortages, and growth and employment for the OEM manufacturing industries. A quick resolution to the trade imbalances will solve many unseen economic manifestations that will occur due to these structural artificial impediments to the overall economy.
- by Mike Meiresonne, IQS Directory
One of the key ingredients to maintaining a positive global marketplace is collegial trade between countries. Many partnerships are strong and create a win-win situation for all concerned parties.
But, there are still many countries who cannot come to an agreement about the ratio of imports to exports between the nations. These disagreements can escalate into imposed tariffs and the beginnings of a trade war.
So why should we be concerned about tariffs and trade wars? Here’s what you need to know.
What Is a Trade War?
A trade war occurs when nations enforce quotas or tariffs on imports and foreign countries retaliate in a similar fashion. As it intensifies, a trade war stymies international trade.
A trade war can begin when a nation tries to protect domestic industry and create jobs, and at times it can work in the short-term. But long-term, a trade war costs jobs and dampens economic growth for everyone. It can also generate inflation because tariffs raise the prices of imported goods.
America’s last major trade war happened after imposition of the 1930 Smoot-Hawley Tariff, which increased 900 import tariffs from 40-48%. It was supposed to support U.S. farmers whose land had been devastated by the Dust Bowl, but it resulted in higher food prices for Americans who were already crippled by the Great Depression.
America’s trade partners at the time hit back with their own tariffs and global trade fell by 65%, worsened the depression, and contributed to the beginning of World War II.
After Smoot-Hawley, the country suffered tremendously. The general public had little understanding of tariffs or trade agreements.
What Is A Tariff?
A tariff is a tax on imported or exported goods, and funds collected by tariffs are called a duties or customs duties. Tariffs can often be utilized by governments to create revenue or to protect domestic industries from cheap goods made by the competition such as in Industrial Ovens, Clean Rooms, Hose Reels to Linear Actuators, Brushes and Plastic bags.
Two types of tariffs are typically used.
According to investinganswers.com, “Ad valorem tariffs are calculated as a fixed percentage of the value of the imported good. When the international price of a good rises or falls, so does the tariff. A specific tariff is a fixed amount of money that does not vary with the price of the good. In some cases, both the ad valorem and specific tariffs are levied on the same product.”
Unfortunately, taxes on imports and exports make foreign goods more expensive for consumers, which causes a decrease in imports, a decrease in supplies, and an increase in the price of the good.
Some economists will posit that the subsequent higher consumer prices, higher producer profits and revenues, and higher government revenues show that tariffs are a way to transfer money from consumers to the government. However, most economists argue that tariffs restrict free market ideals and divert resources to domestic businesses that are less efficient than overseas manufacturers.
This inevitably leads to conflicts between specific countries.
Countries in Conflict
The escalation of any trade war from threat to reality affects global supply chains, increase costs for businesses, as well as consumers, and impact global stock markets, which are already volatile due to the anticipation of a lengthy trade fight between the United States and other global trade partners.
In July of 2018, the US and China started attacking each other with tariffs. U.S. tariffs on $34 billion worth of Chinese products took effect, changing a war of words between China and the US into a full-blown trade war.
The United States’ 25% duties affected products such as water boilers, X-ray machine components, airplane tires and various other industrial parts. China immediately implemented retaliatory tariffs on its $34 billion list of goods issued in June of 2018, including Electric Heaters, Electric Transformers, Check Valves, Solenoid Valves and Flow Meters.
President Donald Trump has stated that another $16 billion in tariffs are expected to be implemented soon. The President said he is ready to impose additional tariffs on $500 billion in Chinese goods, if Beijing retaliates. And the trade wars don’t stop with China.
President Trump also threatened to impose a 20% tariff on European cars coming to America if the European Union doesn't eliminate its trade barriers.
The European Union has stated that America's trading partners could retaliate against approximately $300 billion of US exports if the president decides to impose tariffs on automobile, imports from around the globe.
These types of spiraling trade conflicts threaten to derail a recovering global economy, according to the World Trade Organization. In May of 2018, the US government launched an investigation, into imports of automobiles, known as Section 232, meant to determine whether specific imports are a danger to US national security.
According to cnn.com, “The European Union has said the US investigation ‘lacks legitimacy, factual basis and violates international trade rules.’ And it has argued that new tariffs on autos would damage the American economy.”
But, there is hope on the trade horizon. President Donald Trump has stated that the United States and the European Union have begun a "new phase" in their relationship, stating that the two large economies would start negotiating immediately, working toward "zero tariffs" on industrial products, and further collaboration on energy concerns.
President Trump met with European Commission President Jean-Claude Juncker to work toward an agreement that included zero tariffs, zero non-tariff barriers, and zero subsidies for the non-auto industrial goods.
Economists have stated that, among the issues under consideration, tariffs on imported cars could be a huge threat to the U.S. economy. Juncker agreed that the two leaders would continue to negotiate and were reconsidering existing tariffs on steel and aluminum.
Key details of the arrangement have not been disclosed, but the leaders did agree not to impose further tariffs while negotiations continue - this would help stop a trade war between Europe and the United States.
As reported by CNBC, “. . . it could have been a hell of a lot worse. They agreed to keep talking. Considering how bellicose Trump was when he said ‘tariffs are great.’ I think this was the best outcome you could have hoped for,” said Greg Valliere, global strategist at Horizon Investments. “The reaction from Republicans on Capitol Hill has been so hostile to Trump’s tariff proposal, that that maybe was a factor in them agreeing to keep talking.”
As the world focuses on impending trade wars, consumers are left wondering how this will affect prices and supply and demand for internationally produced goods.
How Does Trade War Affect Me?
The main way trade wars affect consumers is in consumer goods pricing. The current trade war has already increased the prices of consumer goods made of aluminum and steel. Domestic manufacturers that are dependent on imported raw materials are responding to the higher costs. Since they lose profits when tariffs are imposed, their only choice is to cut jobs.
But, the tariffs allow domestic producers of that product to adjust their prices. Their prices would be lower than those who use imports to produce their goods. This would result in more orders from local customers and a need to add jobs to meet the demand.
As a result of the announced tariffs, several U.S. industries were affected. Mid-Continent Nail in Missouri was forced into layoffs because steel prices were too high for them to turn a profit.
Harley-Davidson is moving some production overseas to avoid retaliatory European Union tariffs.
The Maine lobster industry is suffering from Chinese retaliatory tariffs on U.S. harvested seafood. California cheese makers are already seeing their markets in China and Mexico disappear, Wisconsin auto parts producers are experiencing a reduction in profits, and the U.S. bourbon industry has also been hit hard by tariffs.
Foreign tariffs on U.S. exports make them more costly, and U.S. exporters may have to take drastic steps to remain competitively priced, including layoffs. If their steps fail, they may even go out of business.
Long-term, trade wars stifle economic development and create layoffs as foreign countries retaliate. There are millions of U.S. workers whose jobs rely on exports – and they could get laid off.
Here is what some major manufacturers are saying:
Andrew Smith from LSP Industries “We've had a decrease in production”.
Todd Kritzer from Kady International “Stock items now seem to be running out for several weeks. The unpredictability of these items is backing up machine shops and is making it difficult for us to quote accurately”.
Doug Colliver from Western Roller Corp. “Our steel vendor has been passing along tariffs for the past 2 months and we have been absorbing the costs.”
Russell J Greer FCP Mezzanines Inc.
“FCP has experienced steel tariff cost related increases of between 20-35%.
These increases have made many projects outside the approved budget. Customers are having to delay initiating projects until they can get the increased budget approved. While many projects have been delayed, the overall demand for mezzanines has remained strong.”
Jude Masters American Urethane, Inc.
“We have seen continuing pricing pressures.” Molded urethane and Urethane Rollers
Steve Cellary Ford Fasteners. Inc.
“We have not heard anything from our customers yet, but that could change soon. Right now, we are only knowing what is published in the news and we don’t have any more to offer. The reports are saying that our products are affected by the new tariffs.” Screw Machine
Steve Talan Talan Products Inc.
Bernie Rockovich Remaly Manufacturing Company, Inc.
Jeff Folkins Sag Harbor Industries, Inc.
“Wire pricing has been rising”
While a short-term trade skirmish can help domestic industries, protracted trade wars weaken domestic industry, which creates a decline in the quality of products and removes the incentive for manufacturers to innovate and create new or improved products.
While trade wars are messy and have long-term repercussions, the goal is ultimately to maintain fair trade between nations. Trade is a key element in economic stability and trade wars affect the health of the economy.
Regardless of which nations engage in trade wars, their actions ultimately affect the everyday consumer with fluctuating prices for goods and services. The instability caused by trade wars has as much potential to damage an economy as it does to ultimately create a better economic situation for the nations involved.
Industrial Air Pollution Clean-Up Is On Its Way In 2018
Since 1955, the United States government has recognized the need for legislation to clean up air pollution. Subsequent revisions to the initial legislation strengthened the laws regarding allowable amounts of car emissions, factory smog, and other sources of air pollution.
The most recent version, The Clean Air Act of 1990, tackled five areas: air-quality standards, motor vehicle emissions and alternative fuels, toxic air pollutants, acid rain, and stratospheric ozone depletion.
But now, in 2018, it isn’t just legislation and governments fighting air pollution. Private inventors, corporations, and other organizations are harnessing the technology that can aid in cleaning our air all over the world, along with recognizing that some advances in technology are creating more air pollution and combating it with air filter and filtration systems, dust collectors, industrial vacuums, industrial blowers, air compressors, pulverizers, vacuum pumps and many other products.
Technology Is Causing Air Pollution
While it’s true that technology is being used to clean up air pollution, it’s also been the primary cause.
No technological wonder has caused more air pollution than the horseless carriage. Nearly half of Americans—150 million—live in cities that fail to meet federally designated air quality standards. Cars, vans, trucks, and (think dump trucks, lift trucks and backhoes) are the primary sources of such pollution, which includes the release of excess ozone, release of particulate matter, and release of other smog-forming emissions.
Air pollution health effects need to be taken seriously. Bad air increases respiratory disorders like asthma and bronchitis. Air pollution also increases the risk of life-threatening health conditions, such as cancer, and burdens health care systems with substantial medical costs. Particulate matter alone is responsible for up to 30,000 deaths a year.
Industrial pollution is another primary source of air pollution. According to the Environmental Protection Agency (EPA), air pollution levels from 1990 to 2008 increased 14 percent. This trend mirrors the number of human-caused greenhouse gas emissions in the air. Air pollution has serious effects on the health of the planet and its population.
Factories pollute the air mostly through fossil fuel emissions. Fossil fuel emissions include methane, carbon dioxide, and nitrous oxide. While these are naturally-occurring substances, the extremely high levels of emissions are the main concern. Industrial methods also emit manmade emissions of fluorine-containing gases like hydrofluorocarbons.
As an example, the Bulk Material Handling market is huge and air pollution is inherent in its processes. Bulk material handling is the process of packaging, processing and/or transporting bulk materials in preparation for shipment or sale. Bulk materials include dry materials like wood chips, cereals, coal, loose stone and gravel, ore and sand, as well as mixed wastes. Bulk handling material equipment can be made up of all kinds of individual pieces of equipment, depending on the application a system serves. Typically, though, they are composed of a mixture of stationary and moving equipment. Some examples of stationary bulk material handling equipment include: screw conveyors, conveyor belts, pneumatic conveyors, industrial mixers, industrial dryers, vibratory feeders, industrial scales and load cells and palletizers. Some examples of commonly employed moving or mobile equipment include: mobile hopper loaders and unloaders, shuttles, moving floors and various shuttles. To complete a bulk material handling system, systems may also be integrated into large structures, such as storage facilities integrated with mezzanines and storage racks. Bulk material handling, however, is not confined strictly to the land. Rather, bulk material handling systems are used all the time when loading and unloading cargo ships. In fact, increasingly, a type of bulk material handling equipment called the continuous ship unloader is replacing the gantry crane in ports around the world. Common examples of bulk cargo include grains (rice, wheat, maize, oats, barley, rye, etc.), gravel, coal, cements, dry edible agricultural products (livestock feed, peanuts, flour, seeds, raw or refined sugar, starches, etc.), iron, bauxite and petroleum or crude oil.
Aerosols are another significant source of air pollution There are many countries, starting with the United States, which are making significant progress in cutting down on air pollution that is directly related to aerosols.
How Technology Has Helped Decrease Air Pollution in Recent Years
Thankfully, we’ve already made some steps toward cutting the amount of air pollution, and it’s critical that we continue to do so.
The environmental effects of air pollution mean the destruction of oxygen producing plants and damage to long-term forest viability, deterioration of nutrients in the soil, toxins making their way into the food chain, killing and damage of aquatic life in streams, rivers, and lakes, and nitrogen overload in coastal estuaries leading to oxygen depletion and harm to fish and other aquatic animals.
Reducing air pollution has so many benefits! Clean air increases timber and crop yields, and better visibility conditions in 2010 in selected national parks and large cities had an impact of saving $34 billion.
Solar energy has been an alternative source of electricity for decades, though it is not widely used. Sunlight that reaches Earth’s surface provides, “…10,000 times more energy than we consume, and solar power aims to harness this force.” Solar technologies use sunlight captured through solar cells to provide electricity for heating, cooling, and even running small electronics like a calculator.
Researchers have determined that if we covered only 0.1 percent of the Earth’s surface with efficient solar cells, we could replace all other forms of energy. University researchers around the world are trying to develop advanced solar arrays using nanotechnology. Their hope is to harness the sun as our primary form of energy.
The EPA, since the early millennia, has mandated significant reductions in emissions from newer cars, vans, trucks, and non-road engines like those used in construction, agriculture, and industry, as well as trains and marine ships. They called for these changes using standards that combine cleaner fuels and cleaner engine technologies. Since the EPA began regulating through the 1970 Clean Air Act, emissions from all types of vehicles have been reduced from 90-99%.
This led to the development of the electric car and hybrid vehicles. They were first made noticeable by celebrity owners, but now the everyday drivers’ worries about increasing gas prices and the damage fossil fuels have on the environment, have created a demand and market for hybrids.
Sales of hybrid cars like Toyota’s Prius, doubled in January 2006 compared to the year before, with nearly 16,000 cars sold. Hybrids are built with smaller gasoline engines, electric motors, and rechargeable batteries. They deliver outstanding gas mileage and create far less air pollution than traditional vehicles.
In newly built plants that use coal as fuel, builders must install control devices that “capture up to 98 percent of the sulfur dioxide and in many cases 90 percent of the nitrogen oxide emissions, relative to uncontrolled levels.”
Clean technologies are being introduced and old tech is being improved. Though catalysts, scrubbers, and low-VOC paints and coatings were not used in 1970, they have been proven to be effective and are widely deployed today across industries.
Some examples include:
- Selective catalytic reduction (SCR)
- Scrubbers which achieve 95 percent and even greater SO2 control on boilers
- Sophisticated new valves, seals and leak detection equipment, including cameras that can see leaks, for refineries and chemical plans
- Low or zero VOC paints, consumer products and cleaning processes
- Chlorofluorocarbon (CFC) and hydrochlorofluorocarbons (HCFC)-free air conditioners
- , refrigerators, aerosol sprays and cleaning solvents
- Water and powder-based coatings or plating to replace petroleum-based formulations
- Market penetration of gas-electric hybrid vehicles and clean fuels
- Routine use of continuous monitoring technology that provides data more quickly
- Multi-pollutant monitors that helps us to better understand the complex nature of air pollution
New Technology to Control Air Pollution
One of the newest technologies to spring up recently is artist Daan Roosegaarde’s Smog Free Tower. Roosegaarde traveled to Beijing in 2014, and from his hotel room on the 32nd floor, he could not see the city. “It was all gone,” Roosegaarde says. “The city was completely covered with smog.”
Now, he is on tour with the world’s largest, and most impressive, air purifier. The Smog Free Tower will make bubbles of clean air wherever they are placed. Roosegaarde hopes his product will raise public awareness of the dangers of air pollution.
Through ion technology, the Smog Free Tower and Static Eliminator attracts and absorbs small pollution particles — PM2.5 and PM10 — and blows out clean air, leaving a 75% improvement in the air quality. Residues from paint finishing equipment in the manufacturing environment can also produce an abundance of pollution particles.
The tower is seven-meters high and cleans approximately 30,000 cubic meters of air every hour, the equivalent of “a small neighborhood a day,” notes Roosegaarde. One of its most positive qualities is that it requires only 1,400 watts of power — no more than a tea kettle.
Since the late 1990s, the EPA has required industrial plants to lower their emissions. This led to scrubbers. These pollution reduction devices are capable of removing toxic substances from exhaust streams or may neutralize them into harmless or even recyclable substances.
Another industrial pollution reduction option is Baghouses. These are filtration structures that have been retrofitted to power plants across the country. They catch fine particulates—tiny levels of soot, dirt, and chemicals that damage lungs and create smog. Baghouses are like huge vacuum cleaners. They are lined with fabric filter “bags” that are routinely cleaned or replaced.
Another type of air pollution reduction device is Bioreactors. This differs from the large-scale devices used in most industrial plants because “scientists are experimenting with tiny, simple living organisms called cyanobacteria that eat polluting carbon dioxide (CO2).” While most living organisms could never survive a smokestack, these algae flourish in the sweltering temperatures of industrial chimneys.
So, researchers designed “bioreactors.” These window-screen membranes are teeming with cyanobacteria and will be installed into power plant smokestacks in the near future. The light needed to sustain the algae would come from fiber- optic cables streaming light across the membranes. The algae will grow inside the chimneys while gorging on CO2 exhaust.
Finally, we can look to a technology that is already up and running: Biodiesel. This fuel alternative comes from any vegetable oil—including recycled vegetable oil from restaurants—and can power most diesel-engine vehicles without modification.
Since 2005, 75 million gallons have been sold in the United States, and many government vehicles use it as fuel. While it burns 78 percent cleaner than oil-based diesel, it is twice as expensive, and availability is scattered. Although only a fraction of US vehicles run on diesel, new fuel-efficient models on the market continue to gain in popularity.
What WE can do to Clean Up Air Pollution
As consumers, we can help by encouraging companies to use the clean air technologies available to them. These companies and corporations are in the business of making money. If consumers stop buying their products because they aren’t taking pollution seriously, they will go down the drain themselves.
We can also help by investing in alternative energy options like wind, solar, and hybrid vehicles. Such investments would not only help in reducing pollution of all kinds, but ultimately, these investments will pay for themselves and save money for Americans in the long-term. We have the power to make positive changes in air pollution!