The market for UHMW-PE (ultra-high molecular weight polyethylene) powder materials is small but worthwhile. With some 30 converters and five or six continuous suppliers in Europe, the market is basically very clear cut, as is the price situation. Normally, there is little movement in such markets, which is the main reason why Plasteurope.com does not continuously report on the development of prices in this sector.

Now, however, there is good reason to do so and to highlight in this report the general situation on the UHMW-PE market. Before going into details, we must consider the size of the world market (approx. 75,000 t sold in 2000) and the availability of the product. In view of the volumes involved, UHMW-PE powder can be regarded as a niche product with a specialty character. For example, the global capacity of market leader Ticona GmbH (D-60528 Frankfurt) is around 35,000 t/y, and that of another leading supplier, DSM Polyethylenes B.V. (NL-6130 AA Sittard), just about 10,000 t/y. Compared with the commodity plastics, in which the capacities of the big manufacturers can approach 500,000 t/y and more, it is indeed a small segment. Not a lot will change in this respect even though Ticona´s production capacity will rise to about 50,000 t/y in 2002.

The specialty plastic UHMW-PE has a number of outstanding technical characteristics such as its insulation capability and its sliding/friction properties, without which certain special applications would not be possible. Applications include battery separation plates and rods, for example for the automotive industry, special uses for the medical sector such as artificial hip replacements, and heavy-duty fibres.

In the last four to five years, there has been virtual calm on the price front with UHMW-PE powder. Global supply and demand were generally well balanced, perhaps occasionally with slight overcapacities. As a result, suppliers suffered margin losses. During the course of 1999 and 2000, however, the picture has changed radically. Evidently due to the material´s outstanding technical potential, new fields of application have been opened up, especially in Europe and the USA. In Asia, too, companies have been recognising the potential of UHMW-PE, and they want to be sure not to miss the technological boat. As a result, worldwide demand has climbed continuously since the second quarter of 1999. At the same time, some of the production capacities have been lost: in May this year, for example, Buna (BSL, D-06258 Schkopau) brought its production lines to a halt, wiping out capacities which the world market is now sorely lacking due to the increasing demand. According to inside information, annual growth of between 5 and 6% is forecast for the next few years.

As far as prices for UHMW-PE powder in Europe in 2000 are concerned, we can report as follows: Against the background of growing demand and generally increasing raw material and energy costs, suppliers began to successively raise their prices. While the notations for top-quality product in the first quarter were between 1.74 and 1.89 Euro/kg, they had moved up to around 1.99-2.15 Euro/kg by the end of the third quarter. With the exception of the “battery separator” application for the automotive industry, converters were able to pass on the higher prices a portion at a time to their customers and thus at least hold their margins.

In view of further rises in feedstock prices and the continuously climbing demand, UHMW-PE suppliers are planning to bring about a lasting improvement to their margins. The beginning of 2001 will ring in a further round of price increases. Since global demand continues to be greater than supply, the chances of this succeeding at about the same level as this year look very good indeed.