The Odd Story of Sabic’s Ultem Shortage

If you’re an avid Twitter follower, you were the first to publicly learn of a fast-emerging shortage of polyetherimide (PEI). A California-based distributor called Professional Plastics tweeted this on Nov. 6: “Ultem® PEI supply shortage in effect until Q2 2015”. Followers were urged to “order now”.

Another California plastics shapes distributor issued a press release Nov. 21 that stated: “SABIC Innovative Plastics, the producer of Ultem Resins, has announced significant shortages of the Ultem resin through Q2 2015… Many plastic semi-finished plastic shape producers currently have no Ultem resin, and are not scheduled to get more material until April or May of 2015”.

Stock Ultem shapes.

Stock Ultem shapes.

The press release, written by General Manager Hayden Hess, goes on to say: “Some suppliers read the signals, and added additional inventories of this in demand material. Industrial Plastic Supply of Anaheim, California has a large inventory of both Ultem 1000 and Ultem 2300 in both sheets and rods. A full range of sizes and diameters are in stock, and more is on the way.”

Then RTP, a Minnesota compounder that focuses on engineering thermoplastics, issued a press release Nov. 25 announcing availability of custom compounds that are close to PEI in performance, although there may be shrinkage issues and cost premiums involved.

On Dec. 2, Plastics Today published the first media report and then other media joined in starting two days later.

PEI resins, which are based partly on bisphenol A (BPA), were commercially introduced in the 1980s. They are amorphous thermoplastics with high heat and chemical resistance, inherent flame retardancy, transparency and good dielectric strength. HDT is about 400ºF. PEI has applications in the following markets: aerospace, electronics, automotive, lighting, medical instrumentation, electrical connectors and more.

GE Plastics did significant development work on PEI foam for use in aircraft interiors. Film is also an important market for Ultem.

Sabic Innovative Plastics, which bought GE Plastics in 2007, told customers that the shortage is caused by strong market growth for Ultem PEI coupled with a planned maintenance shutdown of the PEI production plant in Mt. Vernon, Indiana in April 2015.

A few thoughts:

  • Shame on you if you relied on a sole source with no qualified backup ready to go. This was a lesson that should have been learned from the polyamide 12 shortage caused by an explosion two years ago at an Evonik plant in Germany.
  • It’s interesting how news gets spread today—even in plastics. Twitter was first. Three or so weeks later, the media got wind of the story. And where was Sabic? Most companies quickly make some public disclosure of these types of situations. Sabic Innovative Plastics still has no information on the shortage on its Web site.
  • It’s not a good situation when some customers are publicly proclaiming that they are getting all the PEI they need—with more on the way—and that smaller competitors are high and dry. Seems like Sabic may have some work to do on supply management and customer relations.
  • And finally, this problem isn’t the result of an explosion or natural disaster. It’s the result of a planned project. Why wasn’t material stockpiled? Why weren’t customers given adequate time to make alternate arrangements?

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I received the following response from Sabic on Dec. 10 to the preceeding post:

“We noticed your blog posting about SABIC’s ULTEM™ resin and wanted to provide some context that hopefully you will find to be helpful in addressing some of your key takeaways.

“We have had an ongoing, direct conversation with our customers regarding this issue. We’ve explained that we are facing the extended lead times because of “a significant increase in global demand for our ULTEM products has resulted in extended lead times for our customers.” While planned maintenance at one of our two ULTEM resin facilities in April 2015 will put short-term pressure on supply, the biggest driver is increased global demand.

“The entire engineering resins industry is facing growing demand for high heat solutions. In fact, we know of some customers who have realized unforecasted double-digit demand growth that has surpassed even their own 2014 forecasts.

“Our communications philosophy is to go direct. We’ve explained the challenge to our customers…both in writing and in one-on-one conversations. These are the people who are most impacted, and as such, we must have a direct dialog with them in order to help them through this challenge. We are committed to filling all of their previously submitted orders and are actively working with them to identify other SABIC high-heat solutions that could be a good interim solution.

“We have increased ULTEM manufacturing capacity over the past few years with the addition of our Cartagena manufacturing facility and are continuing our efforts to optimize this facility to further expand capacity. We are also working diligently to improve capacity in other areas as well. We are confident that these actions will enable us to meet the needs of our customers longer term, and to continue to deliver the unique value they have come to expect from our ULTEM resin. As we begin to see improvement in capacity availability, we will continue our customer-direct communications approach to inform them of adjustments to lead times and/or supply plans as appropriate.”

 

 

About Doug Smock

Former Chief Editor at Plastics World and Senior Technical Editor Design News

Engineering Thermoplastics , , ,

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