London – A lack of raw materials, unreliable deliveries and 'vertical' price rises are hurting flexible foamers and the future of flexible polyurethane foam, several foamers have warned.
UTECH-polyurethane.com contacted a number of European flexible makers after they complained supply problems and rising prices were hitting their markets.
Jurgen Kleinrath, CEO at Eurofoam, is typical of those contacted. 'At some plants, we are desperately waiting at the gate for the next truck,’ he said. ‘We cannot be sure whether they will appear or not.'
Flexible foam makers warned that their customers are not sympathetic, and are starting to look for alternative materials. They report their customers are worried by the unreliability of diisocyanate supply in the northern hemisphere, and that they remember June 2017. This is the last time flexible foamers warned about material availability and price rises.
This year, they reported that the flexible foam business in Europe was tracking the gradual resumption in demand after coronavirus lockdowns eased. That pattern was followed in the furniture and mattress sector and, latterly, by the automotive industry.
However, in September a number of forces majeur were declared by TDI producers, according to the companies contacted, closing between half and two-thirds of production in Europe. Similar supply difficulties are occuring in polyols. Two hurricanes in rapid succession in the US Gulf coast severely disrupted supplies there, too.
Oliver Bruns, CEO at Greiner Foam International, said: 'The shortage of material in the marketplace is putting constraints not only on us, but the whole industry. On average TDI is tighter than polyol, but both are tight.'
Francois Desne, general manager for flexible foam at Recticel, added: 'It's a reliability and availability issue. There is clearly a challenge.'
Gilbert Davids, managing director of Vita Group’s comfort division, Vita Group sent a letter to customers on 30 September. In that letter, seen by UTECH-polyurethane.com, he said: 'The lack of available raw materials is putting a huge challenge on our ability to continue to keep you supplied, both at your required order levels and on time.'
Jurgen Kleinrath, CEO at Eurofoam said: 'At some of our European plants, we have seriously low stock levels, and at some plants 2-5 days, compared to 3-5 weeks under normal conditions. That means we are waiting desperately for delivery and planning from day to day.
He added that some major petrochemical suppliers are not confirming deliveries for the current week, which makes reliable production planning impossible.
Vita's Davids said his company believes that the supply issues would intensify in October. ‘[They] are likely to remain with us to the end of the year,’ he claimed.
Meanwhile, US sources said that at least one foamer there was rumoured to be put on to allocation after bad weather has hit rail supplies, and the hurricanes hit supplies of the upstream products used to make diisocyanates.
Recticel's Desne said that the stoppages could not have come at a worse time for the business. 'Customers are preparing for their winter sales, which traditionally are the highest sales of the year, and they're getting ready for Black Friday and other special sales,’ he said. ‘If there is a time that supply cannot and should not fail… that is exactly now. There is only one winter season each year.'
Greiner's Bruns added: 'In 2017 we had a similar situation… so how can it happen that one or two technical issues have led to force majeure, which are putting business with so many applications and markets into constraint?'
Privately, several interviewees suggested that the apparently simple explanations of pump or valve failures at chemical producers were not cutting any ice along the supply chain. They reported a level of incredulity that large petrochemical producers were not better prepared.
Desne said: 'Raw material supplies should work on the availability of raw materials and reliability of supply.'
Short materials mean higher prices and an unnamed foamer, close to the situation said: 'Over the past two months we have seen a vertical, abrupt and unprecedented increase in raw material costs. We cannot absorb those without jeopardising our profitability and are forced to pass them on to the market to assure our own viability.'
Bruns believes that if reports can be trusted that supply and demand capacity is the same as name plate capacity, the European market should be long and over-supplied. ‘With the plants back on stream, material should become available again quickly,’ he said. ‘How long this will take, and how long the repairs last, we don't know. Anything could happen. It's difficult. It's unpredictable.'