2. SUMMARY
The coal-tar synthetic resin industry in the United States began on a small scale some years before the World War. The output then was confined to a few types of tar-acid resins and the applications were quite limited until 1927, when certain of the basic patents expired. The output of about 1.5 million pounds in 1921 had increased to more than 13 million pounds in 1927 and the average unit value of sales had dropped from 81 cents per pound to 47 cents. Production continued to increase and the unit value to decrease annually until 1932 when general economic conditions forced a slight curtailment for 1 year. Since then the annual increase in volume and variety has been rapid. Production of non-coal-tar synthetic resins was started on a small scale in 1929 when both urea and vinyl resins entered the picture. Commercial production of the petroleum resins began in 1936 and of the acrylate resins in 1937. Table1shows the production and sales of coal-tar resins and of non-coal-tar resins, from 1921 through 1937.
Table 1.—Synthetic resins: United States production and sales, 1921-37
1Does not include resins from adipic acid, coumarone and indene, hydrocarbon, polystyrene, succinic acid and sulfonamides. With the exception of coumarone and indene resins in recent years production of the resins not included was small.2Not publishable. Figures would reveal operations of individual producers.Source: Compiled from annual reports of the Tariff Commission on dyes and other synthetic organic chemicals in the United States.
1Does not include resins from adipic acid, coumarone and indene, hydrocarbon, polystyrene, succinic acid and sulfonamides. With the exception of coumarone and indene resins in recent years production of the resins not included was small.
2Not publishable. Figures would reveal operations of individual producers.
Source: Compiled from annual reports of the Tariff Commission on dyes and other synthetic organic chemicals in the United States.
Many factors have contributed to the growth of the synthetic resin industry. Among these are the intensive research and development work carried on by many individuals and firms; their widespread application in many fields competing with wood, metal, and glass; and the development of processes for raw materials which have greatly reduced their cost and made their wider use possible.
Raw materials.—Although the chief raw materials consumed in the synthetic resin industry are coal-tar derivatives and formaldehyde, many others are utilized. The rapid expansion of the industry has created new demands for materials in increasing quantities and has not only increased the markets for well-known materials but has resulted in the production on a huge scale of materials entirely new to commerce. Practically all the raw materials now used can be derived from a few natural substances, such as air, water, coal, petroleum crudes, salt, sulphur, and limestone. The air yields nitrogen which may be converted to ammonia, a raw material for urea, one of the components of the urea resins. Coal, as is well known, yields a great variety of substances, many of which are essential to synthetic resin manufacture. Benzene is the starting point for synthetic phenol; naphthalene is used to make phthalic anhydride and maleic anhydride; coke is converted to calcium carbide, which in turn yields acetylene, acetic acid, and many other synthetics; carbon monoxide which is converted to methanol and formaldehyde; and the natural tar acids such as phenol, the cresols, and the xylenols. Limestone is a component of calcium carbide, and salt yields needed alkalies and acids. Water is broken down, and the hydrogen is converted to ammonia, methanol, formaldehyde, and ethylene.
Some idea of the expansion in production of these raw materials whose principal use is in synthetic resins may be had by comparing the output in 1923 of tar acids, formaldehyde, phthalic anhydride, maleic anhydride, urea, vinyl acetate, and vinyl chloride, which amounted to 35 million pounds, with the output of 270 million pounds in 1936. The manufacture of these materials is largely by coal-tar distilling companies and makers of chemicals.
Resins.—The coal-tar resins are the most important in quantity, value, and variety of application. This class includes four groups: (a) tar acid, (b) alkyd, (c) coumarone and indene, and (d) polystyrene. Of these, resins from tar acids (phenol, cresols, and xylenols) are produced in the largest quantity, the output having increased from about 15 million pounds in 1932 to about 80 million pounds in 1937. In the latter year about 40 percent of the consumption of tar acid resins was in molded articles, 25 percent in paint and varnishes, 20 percent in laminated products, and 15 percent in miscellaneous uses.
The alkyd resins have shown a remarkable increase in output. Production totaled slightly less than 10 million pounds in 1933; in 1937 it amounted to about 61 million pounds. Practically all of the alkyds have been consumed in paints and varnishes.
The coumarone and indene resins have increased steadily over a number of years and are now one of the most important groups.
The polystyrene resins have been in an experimental stage for a long time, with the volume of production small. In 1937, however, commercial production of a water-white product was announced, and it is believed that the output of these resins will increase sharply in the near future.
The non-coal-tar resins were of little importance prior to 1930 and production amounted to less than 2 million pounds in 1932. Since then, however, progress has been rapid, both in types and output. Resins from urea constitute an important part of this class and the output has increased practically every year since 1929 when production was started. Most of the output is used in molded articles where light and pastel shades are required. In 1936, for the first time, appreciable quantities were consumed in laminating and in surface coatings.
The vinyl resins have been produced in increasing quantities for the past 8 years. Production reached a new high in 1937, and with the acceptance of this type of resin for safety glass laminations it is expected that the output will increase materially in the near future. In 1937 the application in surface coatings, molded articles, and laminations were of approximately equal importance.
The acrylate resins are among the newest commercial developments in this industry. Of the several types now manufactured, one appears valuable in surface coatings and adhesives and another, in the form of its cast or molded polymer, in airplane windows, machined articles, and lenses.
Petroleum resins were first produced in commercial quantities in 1936, but the output in that year was appreciable. These low-priced synthetics are used in surface coatings, laminations, and miscellaneous uses.
World production of synthetic resins at this time is estimated at 300 million pounds annually, of which the United States accounts for 45 percent. Germany produces about 27 percent and Great Britain about 20 percent of the total and a number of countries including France, Italy, Czechoslovakia, Canada, and Japan produce the remainder. Practically all types are made in Germany and Great Britain although in lesser quantities than here. The urea resins originated abroad, as did the acrylates and polystyrenes.
Commercial development of the synthetic resins abroad has been somewhat behind that in the United States, although in recent years the increase there has been so rapid as to seriously affect the international raw material market. Germany, formerly one of our principal sources of crude naphthalene, for a time restricted exports of that commodity in order to conserve the available supply for home consumption, presumably in alkyd resins. Great Britain, formerly the principal exporter of phenol, has found it necessary to supplement production of natural phenol with synthetic phenol. It is possible that in the future similar conditions may arise in world markets for cresylic acid.
International trade in the synthetic resins has been small. Germany has been the principal exporting country. There are a number of reasons for the negligible movement of these materials in international trade, the chief of which are active home markets in the principal producing countries; the existence of patents of a basic nature which limited trade to the owners and licencees under them; affiliation of producing companies in different countries with allocation of the world market; and high tariff barriers in many countries.
The principal domestic producer of tar-acid resins is affiliated with firms in Germany, the United Kingdom, France, Italy, Canada, and Japan. The two principal American makers of urea resins have or have had agreements as to patents, exchange of technical information, and probably markets, with producers in Great Britain. Similar conditions exist with other types of resins.
In 1937 production of all synthetic resins in the United States amounted to 162 million pounds and imports to less than 674,000 pounds (see table13, p.58). Production of tar-acid resins in that year amounted to 79.8 million pounds; alkyd resins to 61.2 million pounds and all coal-tar resins to 141 million pounds. Imports of all coal-tar synthetic resins (which would include both tar acid and alkyd as well as others) amounted to only 19,000 pounds. Coal-tar resins are dutiable at 7 cents per pound and 45 percent ad valorem based on American selling price. On the small imports in 1937 the duty collected averaged 54 percent ad valorem on American selling price and would have averaged much higher had it been calculated upon foreign value as are most duties.
In 1937 the production of non-coal-tar resins totaled about 21 million pounds. In that year imports of non-coal-tar resins totaled 65,000 pounds. Imports of non-coal-tar resins, other than vinyl resins, amounted to less than 2,000 pounds. These were dutiable at4 cents per pound and 30 percent ad valorem on foreign value, equivalent on the average to 48 percent ad valorem. The vinyl resins have been imported into the United States in increasing quantities in recent years. The principal foreign producer, in Canada, developed markets in the United States, but is a joint owner of a plant now under construction in this country. Imports of vinyl resins in 1937 were 653,000 pounds. These were dutiable at 3 cents per pound and 15 percent ad valorem on foreign value, equivalent to 25 percent ad valorem.
It is apparent that foreign competition with United States producers in the home market has been and is likely to continue insignificant under existing duties. With a large home market and generally favorable conditions with respect to the necessary raw materials and the technical skills, this situation would probably continue even under lower duties. Moreover, as international trade develops in these materials, this country is more likely to be a net exporter than a net importer.