Plastics News - Show Daily - October 24, 2022 - 22

22 * Plastics News, October 24, 2022
22 * Plastics News, October 16, 2019
SHOW DAILY
Lanxess cautiously optimistic for coming year
SHOW DAILY
By Shahrzad Pourriahi
Plastics News Europe
As a major supplier to the automotive
industry, German specialty
chemicals company Lanxess AG is
upbeat about the prospects of the
automotive market despite a signifi -
cant decline in demand, particularly
in Europe, so far.
In a Q&A ahead of K 2019, Axel
Strong US dollar impacting global plastics sectors
REAL BROAD DOLLAR INDEX
F
or a number of reasons,
it always seems like a
good idea to discuss the
currency markets during
Tuchlenski, head of global product
and application development in the
High Performance Materials business
unit of Lanxess, told Plastics
News that the industry was " close to
bottoming out " the downturn, adding
that his company was " cautiously
optimistic for the coming year. "
Despite the subdued automotive
market, Lanxess has continued with
expansion plans, having recently
increased production capacity for
Tepex-branded continuous fi ber-reinforced
thermoplastics (CFRT) by
50 percent in Germany, according to
Tuchlenski.
the K show. Obviously, plastics
is a global industry. A lot of
people from countries outside
of Europe will attend the show,
and they will all need to budget
their travel expenses. And more
importantly, all the exhibitors I
have ever met are acutely concerned
about fluctuations in the
exchange rates.
This is because these fl uctuations
not only affect how much it
costs companies to exhibit their
wares at the show, but they also
immediately affect the market
for their products. And given the
prevailing macroeconomic environment
this year, such a discussion
feels especially timely.
To facilitate my analysis this
time around, I have included the
most recent chart of the monthly
values for the real broad dollar
index, which is reported by
the U.S. Federal Reserve. This
index is based on a weighted
average of the foreign exchange
value of the U.S. dollar against
the currencies of a broad group
of major U.S. trading partners.
The index values for this particular
chart have been adjusted
for inflation, and the index base
is January 2006=100.
As the chart illustrates, the
value of the dollar is at an elevated
level, and it is rising rapidly.
The data on this chart has
not yet hit a cyclical peak. The
last cyclical low point was in
January 2021, and the line has
climbed steadily ever since.
From the last trough, the value
of the dollar appreciated almost
7 percent by the end of last year.
So far this year, it is up another 9
technology and the thermoplastic
composites of the Tepex brand.
At K, we will be exhibiting a highLanxess
is bringing its high-tech
plastics and more to K this year.
On Oct. 18, Tuchlenski will be
joined by Greg Mulholland of Citrine
Informatics, a U.S.-based artifi cial
intelligence company, to present
the two companies' groundbreaking
technologies in the use of AI
for developing customer-specifi c,
high-performance plastics.
Q: What is Lanxess offering at K
this year? What would you say is
the highlight of the Lanxess booth?
Tuchlenski: Among other things,
the High Performance Materials
business unit will present new
products and applications for electromobility.
New materials include
orange-colored, heat-stabilized and
fl ame-retardant compounds for
high-voltage applications and materials
that can be used in applications
that are particularly sensitive
to electrocorrosion.
Other examples are halogen-free,
fl ame-retardant materials for components
such as cell holders or battery
end plates.
When it comes to lightweight construction,
Lanxess is concentrating
on the new hollow-profi le hybrid
strength seat shell and a Tepex front
end carrier with integrated functions,
both of which exhibit excellent
crash resistance.
We will also be presenting new
compounds for the economical
blow molding of, for example, air
ducts for turbocharged internal
combustion engines and liners for
hydrogen and natural gas-powered
vehicles. At our plastics technology
center in Dormagen, Germany, we
put a state-of-the-art blow molding
facility into operation and established
a global team that develops
materials for special applications.
Some of the many highlights at
our stand will certainly include a
tank fl ap made of Pocan, a glass ballfi
lled PBT that can be painted in line
and is characterized by very good
surface quality and high toughness.
Components for high-quality fur100
110
120
130
80
90
2012
2013
2014
percent.
A sustained rise of this
magnitude is unusual, and the
result is the value of the dollar
index is the highest it has been
in more than 20 years.
So what does this mean for the
worldwide plastics industry?
The first thing it means is that
John Connally's oft-cited proclamation
from 1971 still rings just
as true as it ever did. Connally
was the Treasury secretary in
the Nixon administration at the
time the U.S. went off the Gold
Standard. At a G10 meeting in
Rome he told his counterparts,
" The dollar is our currency, but
it's your problem. "
By a wide margin, the U.S.
dollar is the dominant currency
in world trade. This situation is
less acute, though by no means
insignifi cant, for countries within
the euro region. But for the rest
of the world, it means that if a
country wants to engage in trade,
Q: Lanxess has been expanding
niture fi ttings made of a material
from the new Durethan P series will
also be on display. Another highlight
is the heat dissipation connector,
which can dissipate a large
part of the locally generated heat
to the environment thanks to our
new thermally conductive Durethan
BTC965FM30. Also worth mentioning
is the innovative BAGS (Bolster
Active Grill Shutter) system, which
is made of Durethan for the new
Ford Focus. This was developed in
close cooperation with OEM and
Tier 1.
Axel
Tuchlenski
Lanxess AG
HALL 6/C76
Tuchlenski
its CFRT technology
over
the past seven
years. Can you
please tell us
more about the
latest developments
in this
technology?
Any expansion
plans? New
products/applications?
Tuchlenski:
Sources:
Board of Governors of the Federal Reserve System, Mountaintop Economics & Research Inc.
We have increased our Tepex manufacturing
capacity by approximately
50 percent to meet the strong
demand in the mass production
of highly loadable components for
light automobiles and consumer
electronics. For the expansion from
six to eight production lines, a new
hall with an area of around 1,500
square meters was built. The investments
amounted to a mid single-digit
million amount.
We regard the establishment of
the hybrid molding process with
variothermal molds for the production
of decorative components as a
major milestone in the fi eld of thermoplastic
composites.
Following the introduction of the
hybrid injection molding process
for structural components, primarily
in the automotive industry,
this is the next evolutionary step
in the use of Tepex, since in the
sports and electronics industries,
for example, the focus is not only
on mechanical properties but also
on the outstanding appearance of
fi ber composite components.
One example of Tepex's use for
mass production are laptop housings
of one of the world's three largest
computer manufacturers. In this
application, Tepex has substituted
both thermoset and magnesium
components with carbon fi bers in
six- to seven-digit quantities per
month. In addition, Tepex meets
the high requirements for fl ame retardance
(UL94-V0) as well as high
torsional and bending stiffness.
Tepex is also becoming increasingly
established in the automotive
industry in the mass production of
2016
2017
2018
its markets will be directly and
heavily infl uenced by the value
of the U.S. dollar. This is why the
dollar is the preferred reserve
currency around the world.
Such a strong preference for
greenbacks is not an unmanageable
problem for other countries
when the global economy and
global trade flows are growing
steadily. The problems start to
emerge when the global economy
is under stress. The predominance
of the U.S. dollar makes
it a natural hedge against risk
during times of economic uncertainty.
As the risks to the global
economy rise, the demand for
U.S. dollars also increases.
At the present time there are
two causes for global economic
stress: slowing overall growth
and intolerably high rates of infl
ation. These persistent stresses
are currently underpinning the
rise in the value of the U.S. dol2015
2019
lightweight
structural components
such as front ends and bumper
beams, brake pedals and underbody
panels. A more recent application
example is two electrically adjustable
individual rear seats for a variant
of the Audi A8, whose seat shells
are manufactured using the hybrid
molding process from a polyamide
(nylon) 6-based Tepex dynalite.
We are also continuing to work
intensively on the development of
standardized material parameters,
particularly in the automotive sector.
In this way, we can further advance
the simulation of the entire CFRT
process chain. Here we are now in
a position to accompany the entire
chain with simulation tools from
component design to the process.
Q: Another area of focus for
Lanxess has been compounding
activities. How is the construction
of the compounding plant in
Krefeld and the expansion project
in China coming along?
Tuchlenski: All expansion projects
in the compound area are making
good progress and are fully on
schedule.
We expect to commission the
plant in China in October. As things
stand at present, capacity expansion
in Germany will begin in mid2020
with ramp up.
2020
2021
2022
lar. And the real problem is that
as the value of the dollar rises, it
creates more stress on the rest of
the world economy. This in turn
creates even more demand for the
dollar. In other words, we are now
in the throes of a vicious cycle.
At some point this feedback
loop will break. The data point
on the graph that ultimately represents
the peak in the value of
the U.S. dollar will thenceforth
be referred to as the infl ection
point, and a downward trend in
the value of the dollar will follow.
The problem is that nobody
knows for sure when this inflection
point will be established.
Neither do they know how high
the peak will be.
It is possible the last point on
the graph, the September data
point, is the peak, and a downtrend
in the value of the U.S.
dollar will start with the October
value. We will have to wait anoth'Numbers
That Matter' by Bill Wood appears in Plastics News monthly.
It takes a close look at data and trends to help plastics company
managers forecast next quarter and next year.
tors, including local factors, which
cannot be predicted in the current
situation. In Europe, electric mobility
will continue to gain momentum
and demand will pick up again,
while the further development of
the diesel engine in Germany, for
example, can hardly be estimated.
Lanxess is cautiously optimistic for
the coming year.
Q: What measures are Lanxess
taking to mitigate the market
pressure?
Tuchlenski: Lanxess' global positioning
enables it to balance out
regional imbalances to a certain
extent.
er two weeks before we know the
fi nal value for the month of October,
but based on the data we
have so far, there is a good probability
the October value will be
lower than the September value.
But one month does not make
Q: Lanxess was substantially impacted
by the recent automotive
decline in the fi rst half of 2019.
How do you assess the market for
Lanxess for the rest of the year?
How do you see the market developing
in the short term?
Tuchlenski: The signifi cant
decline in demand from the automotive
industry, particularly in
Europe, naturally also left its mark
on Lanxess.
However, we believe that we are
close to bottoming out here. External
factors such as the trade war between
China and the United States,
however, are diffi cult to assess in
terms of their further impact.
If no further trade barriers are
introduced, we expect demand to
settle at the current level for the
rest of the year. Further market development
will depend on many facPavilion
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a trend. The modest pullback so
far in October notwithstanding,
it will be several months before
we know for sure whether September
was the month in which
the value for the U.S. dollar
peaked. I am certainly not going
to rule this possibility out
yet, but as of this writing I am
far from convinced that we have
seen the high point in this cycle.
The market has anticipated
much of the future economic
risk, and this is likely already
refl ected in the current market
price of the dollar. Problems arising
from such risks as further interest
rate hikes by the U.S. Federal
Reserve and higher energy
prices in Europe this winter are
already priced into the currency
markets to a large extent. It is not
yet clear whether more hedging
of these risks will be needed, but
it is certainly possible the markets
will navigate these particular
issues in an orderly manner.
The greater risks stem from
the unknown problems. As I
said, the global economy is under
stress. Further stress from
pandemics, wars and natural
disasters is always a possibility,
and the global economy may
also be particularly vulnerable
at the present moment to some
kind of financial shock. Or maybe
it will be something nobody
has thought of yet. But any indication
of additional stresses
such as these will almost certainly
push the value of the dollar
higher than it is now.
This is being done in the current
situation. In addition, we have been
able to reduce excess orders from
2018 and are now back on the road
with normal delivery times for all
our compound products.
With regards to Tepex, due to the
very positive introduction of CFRT
worldwide in mass production
products, this business area is currently
booming.
Q: Finally, does Lanxess have
any expansion or greenfi eld projects
in the pipeline? If yes, can you
please elaborate?
Tuchlenski: At present, we have
no further expansion plans in the
compound area of engineering plastics
apart from the capacity expansions
in China and Germany already
mentioned above. In the CRFT area,
we have just completed the expansion
of capacity as described above.
Audi A8 seat shells are
manufactured using the hybrid
molding process from a nylon
6-based Tepex dynalite. Compared
with a comparable metal version,
the seat shells are around 45
percent lighter. Audi AG photo
Taiwan Pavilion Page
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Index, January 2006=100
Plastics News - Show Daily - October 24, 2022

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