FEP Shortage? How the recent tragedy in Japan effects the Cabling Industry
I was privileged to be included in a meeting with 2 representatives from Daikin yesterday. Daikin and DuPont are the only manufacturers of fluoropolymers (FEP) in the world today – and, in case you didn’t know (because I didn’t) – LAN cable is the single largest application using FEP in the world.
CSC has been updating you with our quarterly Market Briefs (view the most recent one embedded on the sidebar of this page), which includes information on the FEP shortage in the marketplace, and the many reasons for it. These include:
- Dyneon, the 3rd manufacturer of FEP, exited the marketplace in December 2010
- Increased use of FEP by higher performing category cables (Category 6 and above) compared to Category 5e and lower
- Growth in film and tubing application globally, which competes for available FEP supply
- Overall Economic recovery
Daikin runs 3 manufacturing plants. One plant is in Alabama in the United States, the other two are in Japan. The first thing I want to mention is that Daikin has reported that all Japanese employees are accounted for and that no one was injured in the catastrophic event that occurred last week. Regarding the status of their Japanese plants:
- Kashima Plant (outside of Tokyo) – did not sustain any functional damage during the earthquake and Tsunami. However, the plant has been closed due to lack of power, water and gas. Daikin representatives can not speculate on when the plant will be back on-line at this time.
- Yodogawa Plant (outside of Osaka) – also saw no damage due to recent events, and is currently running. Some raw materials needed to produce FEP are supplied from the Kashima Plant. This means the total FEP output of the Yodogawa Plant may be reduced for the time being.
So what does all of this mean to you? As you might guess, price increases were announced previous to this devastating event because of the original market factors in play. Will prices go up even further with the additional tightening of the global FEP supply chain due to the recent disaster in Japan? We can only predict this will likely be the case – our Daikin reps did not confirm nor deny this. No matter what happens, CSC will continue to watch these developments closely and keep you informed.
Keep your browsers pointed right here, as we’ll be providing you with the latest info on the FEP situation as it becomes available. In the meantime, here are some links to the current press releases from Daikin:
- Daikin Press Release dated 3.24.11: Updated Product/Shipment Information – Northeast Japan Earthquake
- Daikin Press Release dated 3.16.11: Letter to Customers RE: Japan Earthquake & Tsunami and its impact on DAIKIN
- Daikin Press Release dated 2.3.11: Daikin Industries, Ltd. will raise the prices for all fluorochemical products.
- More Daikin Press Releases