them in sheets, rods, and tubes. The castings are made in molds of lead
or glass, and the range of possible shapes is limited. The consumers of
these products fabricate them into finished form by cutting, turning,
and polishing, much as they might fabricate wood or soft metal. Since
considerable labor is required per unit, fabrication is not particularly
adapted to large-scale production. In 1937 there were nine producers of
cast phenolic resins. One of the smaller producers was also a fabricator
of cast resins, and another a producer of raw materials used in making
the resin.
_Tar-acid resins for coatings._—The use of tar-acid resins in surface
coatings has been overshadowed by the more rapid development of alkyd
resins. Nevertheless the volume of tar-acid resins used as raw materials
by varnish and lacquer manufacturers is growing rapidly. They are used in
marine varnishes unmodified by other synthetic resins, but to a greater
extent in combination with other plastics, especially the alkyds and
nitrocellulose. The coating industry includes many units producing on
a large as well as a greater number producing on a smaller scale. In
general, they are not producing their own tar-acid resins. In 1937 there
were 11 producers of tar acid resins for coatings (including the three
largest) who confined their activities to resin production. In addition
there were eight manufacturers of varnishes and lacquers and one producer
of resin raw materials, who also produced tar-acid resins for use in
coatings.
_Tar-acid resins for miscellaneous uses._—The chief uses for tar-acid
resins other than for molding, casting, laminating, and in coatings are
as a bonding material, and as an adhesive. These resins form a valuable
bonding agent for asbestos in brake linings and chemical tanks, for
abrasives and for ground cork in special uses. As an adhesive they are
used in making moisture-resistant plywood.
In 1937 there were five producers of tar-acid resins for miscellaneous
uses, including the largest, who confined their activities to the making
of resins and two, including the second largest, who also made products
in which these resins were consumed.
_Alkyd resins made from phthalic anhydride._—The rapid increase in
the production of alkyd resins for use in coatings is one of the most
remarkable in the whole resin industry. They go into varnishes, lacquers,
and enamels for spraying, brushing, and dipping. The coatings may be
air-dried, with a wide range of drying time, or dried by oven baking. The
volume of alkyd resins used by the coating industry has grown so large
that a number of coating firms have gone into the production of alkyds
and now make part or all of their own requirements. In 1937 there were
24 paint, varnish, and lacquer firms producing alkyd resins. Included in
this number were the first and second largest producers of such resins.
Eleven producers of these resins, including the third and fourth largest,
made alkyd resins for sale only. Each of these groups included one firm
which also made phthalic anhydride.
_Alkyd resins made from maleic anhydride._—In 1937 there were seven
producers of alkyd resins from maleic anhydride who produced for sale
only. This group included the two largest producers and also one firm
which produced maleic anhydride. In addition there were five paint,
varnish, and lacquer firms producing part or all of their needs of
resins of this type. The general conditions under which these resins are
consumed are the same as for alkyd resins made from phthalic anhydride.
_Urea resins for molding._—The conditions under which urea resins are
molded are not greatly different from those already discussed for
tar-acid resins. The molding cycle is somewhat longer and, because of
the light colors used, special precautions must be taken to prevent
discoloration of the molded product by dirt or flecks of molding powder
from other operations, carried through the air or upon the person of the
laborer. In 1937 there were four producers of urea resins for molding.
Three of them, including the two largest, produced for sale only; the
other consumed his own production.
_Urea resins for other uses._—Until recently urea resins were thought
of exclusively for molding, but they are now being used for laminating,
for surface coatings, and also as an adhesive. Ordinarily the ureas are
used only in impregnating the outside laminae of a laminated sheet where
they are valuable for the light colors they make possible. The volume of
urea resins used in surface coatings is small compared with the alkyd or
tar-acid resins used for this purpose, but is increasing. The use of urea
resins in adhesives is still new but promises to become important.
In 1937 there were four producers of the ureas for uses other than
molding, who produced for sale only; and two producers who consumed their
own product.
_Coumarone and indene resins._—Coumarone and indene resins are produced
in connection with the production of solvent naphtha. There were three
producers in 1937, all of whom sold their product. These resins go into
varnishes, where they replace natural resins or ester gum.
_Other resins._—In 1937 there were four producers of vinyl resins in
the United States, and two of these also produced their raw materials.
The vinyl resins were used chiefly in surface coatings, molding, and
in safety glass. The polystyrene resins, used chiefly for molding and
laminating, were offered by two producers for the first time in 1937.
Two other producers offered acrylate resins, which are cast, molded, or
used in surface coatings. In the same year petroleum resins were sold in
good volume, their only producer obtaining them as a byproduct of the oil
industry.
Relationship of the resin industry to other industries.
The term “synthetic resin industry” is a very broad one, referring
in reality to a group of industries producing the varied synthetic
resins—much as the term “steel industry” includes the manufacture of pig
iron, structural steel, tin plate, and wire. But it is interesting to
examine briefly the connection of the synthetic resin industry with some
of the other large industrial groupings.
_Relationship to the chemical industry._—Since the processes involved
in the production of the synthetic resins are essentially of a chemical
nature, the whole industry might be legitimately classed as a branch
of the chemical industry. Historically, the synthetic resin industry
in the United States developed outside of the chemical industry as
it was constituted at the time, but with the passage of years and
the development of a greater variety of resins the connections have
multiplied. Chemical companies supply some of the important raw materials
for synthetic resins; their skilled experts possess the technical
training to develop new resin processes; their research programs from
time to time lead to the discovery of valuable facts regarding resin;
and they possess, or can, more easily than a new company, obtain the
capital necessary to exploit a process.
At present the interest of the large chemical corporations in synthetic
resins ranges from active participation to apparent indifference; but
the growing number of corporations thought of as chemical which are
now engaged in experimental production would seem to indicate that in
time they will be increasingly important in the production of synthetic
resins. Some of the larger chemical companies that are important
producers of synthetic resins in 1938 are:
American Cyanamid Co Urea resins.
Carbide & Carbon Chemicals Corporation Vinyl resins.
Dow Chemical Co Polystyrene resins.
E. I. du Pont de Nemours & Co Alkyd, acrylate, vinyl resins.
Monsanto Chemical Co Petroleum resins.
_Relationship to the surface coating industry._—The use of tar-acid,
alkyd, urea, and vinyl resins as raw material for the surface coating
industry has already been mentioned, and also the fact that the coating
industry is manufacturing a substantial part of its consumption of alkyd
resins.
At present the synthetic resins go chiefly into varnishes, lacquers, and
enamels for inside use and into finishes for outside use on metal. Now
that coatings incorporating synthetic resins are successfully adapted to
outside finishes on wood, the incentive for the production of resins by
the coating industry will presumably increase because of the large volume
of house paints sold.
_Relationship to the electric industry._—The electric industry offered
one of the first large markets for synthetic resin products. Molded and
laminated parts for appliances and fixtures gave good insulation at
ordinary voltages, and frequently allowed a simplification of the design.
This development, coming at a time of rapid expansion in the manufacture
of electric equipment, was a distinct benefit to both the electrical and
synthetic resin industries. The larger electrical manufacturing firms
soon began to do their own molding and laminating and became important
as custom molders. Later the General Electric Co. and the Westinghouse
Electric & Manufacturing Co. manufactured their own tar-acid resins.
Another important outlet for synthetic resins appeared with the
development of the radio industry. Radio now offers a market for
special synthetic resins possessing high dielectric constants at radio
frequencies, and much larger volumes of tar-acid and urea resins are used
in molding the smaller cabinets. As a rule the radio industry purchases
its resin products already molded to order.
_The relationship to the auto industry._—The automobile manufacturing
industry and makers of automobile parts together furnish a substantial
market for synthetic resins. In general, the automobile manufacturers
purchase parts made of resin, already fabricated; parts makers usually
purchase the resins they require. The Ford Motor Co. makes tar-acid
resins for its own use. Working parts, such as timer heads and horn
buttons, are usually of molding tar acid resin; the timing gear usually
of laminated tar-acid resin. For decorative parts, such as dash
instrument knobs and radiator ornaments, urea and cast phenolic resins
have been used. Most of these parts are small, but altogether they
have taken a substantial volume of synthetic resin. Safety glass for
automobile windshields is now being made from vinyl resin.
The future possibilities are difficult to appraise. The automobile
industry is constantly experimenting with new materials and methods, and
its policy of bringing out models annually makes possible rapid adoption
of new developments. Molded window frames have been tried, and such a
use, or use for the complete instrument panel, would obviously consume
synthetic resins in much larger volume. Even whole motor car bodies of
laminated resin have been suggested.
13. THE UNITED STATES TARIFF AND INTERNATIONAL TRADE IN SYNTHETIC RESINS
Synthetic resins enter into the foreign trade of the United States only
to a small extent. This becomes apparent if a comparison is made between
the United States production of these resins and our imports and exports
of them. Table 13 gives the imports and production of synthetic resins in
the United States for 1934 through 1937. Exports are so small that they
are not separately reported.
TABLE 13.—_Synthetic resins: United States production and imports,
1934-37_
[Pounds]
-------------------+------------+------------+-------------+------------
| 1934 | 1935 | 1936 | 1937
-------------------+------------+------------+-------------+------------
Production in the | | | |
United States[1] | 56,059,489 | 95,133,384 | 132,912,821 | 162,104,713
Imports into the | | | |
United States | [2] 19,795 | [2] 21,120 | [3] 626,608 | [3] 673,880
-------------------+------------+------------+-------------+------------
[1] Does not include coumarone and indene resins, sulfonamide
resins.
[2] Does not include imports of vinyl acetate resins which were
not shown separately until 1936.
[3] Includes vinyl acetate resins and all other types imported.
The small size of the international trade in synthetic resins is also
emphasized if we compare the imports of all synthetic resins with the
imports or exports of some of the important raw materials used in their
manufacture. Table 14 makes such a comparison.
TABLE 14.—_Comparison of international trade of the United States in
synthetic resins and in certain raw materials for resins, 1934-37_
[1,000 pounds]
-----------------------------+--------+--------+--------+--------
Imports into or exports from | | | |
the United States | 1934 | 1935 | 1936 | 1937[1]
-----------------------------+--------+--------+--------+--------
Imports: | | | |
Resins | 20 | 21 | 627 | 674
Crude cresylic acid[2] | 7,332 | 7,010 | 13,794 | 16,745
Crude naphthalene | 47,995 | 48,455 | 39,806 | 52,664
Crude glycerin | 15,081 | 8,220 | 11,149 | 13,441
Refined glycerin | 2,214 | 69 | 3,447 | 7,535
Exports: | | | |
Phenol | 329 | 323 | 149 | ([3])
Formaldehyde | 2,597 | 2,598 | 1,844 | 2,865
-----------------------------+--------+--------+--------+--------
[1] Preliminary.
[2] Conversion factor 8.7 pounds per gallon.
[3] Not available.
There are three factors that together largely account for the small size
of our foreign trade in synthetic resins. As a result of the comparative
youth of the resin industry, the complicated patent situation, and the
substantial tariff rates upon imports of resins into the United States,
domestic producers have experienced little competition from abroad. The
first two of these forces plus the tariff barriers of other countries
have caused them to pay little attention to export markets. But it
should be observed that both of the first two forces will become less
important with the passage of time. When home markets have been more
fully exploited, problems of production have become less pressing, and
most of the basic patents on resins have expired, international trade in
synthetic resins may be expected to increase from its present low levels.
If this occurs, the United States, with its large scale production for
the home market and with its generally favorable position with regard to
the raw materials and the technical skills necessary, is more likely to
become a net exporter than a net importer of synthetic resins.
Rapid expansion of business in home markets.
Being young industries and having potentially large home markets awaiting
development, the synthetic resin industries in the United States
naturally began by concentrating first on their numerous production
problems to meet a rapidly expanding domestic demand, improving their
products and devising useful applications.
The tar-acid-formaldehyde resins for molding were the first to develop.
The industry producing them may be said to have started around 1910,
but did not become important until after the World War, when the drop
in price of phenol made the resins available at lower prices. The alkyd
resins and the urea-formaldehyde resins in the United States began to be
important in 1929 and 1930, respectively. The others may be said to be
still in their earliest stages of development as industries, however much
research work may have been done as to their properties and production.
The effect of patents on international trade.
A second factor involved in limiting international trade in resins is
that relating to patents. The basic patents on tar-acid resins have
expired; but while they were in force, they prevented imports into the
United States. In the United States a valid patent can be enforced at
law not only against domestic products which infringe but also against
imports. In addition to court action, the provisions of our tariff law
prohibiting unfair competition in the import trade were invoked to
prevent entry of synthetic phenolic (tar-acid) resin, form C, but when
the basic patent for this material expired, the exclusion order no longer
applied to single color material, except in the matter of certain marking
requirements.[6]
The patent situation may militate against exports as well as imports.
Where a company owns foreign patents it may set up a company to exploit
them abroad, or it may license their use by others. Again, mutual
interest may dictate an exchange (by cross-licensing) of certain patents.
International licensing of patents is usually accompanied by divisions
of international markets through formal or informal understanding. Such
agreements may outlive the life of the patents, especially if bolstered
with financial connections. But unless the original producers continue
to dominate their respective markets, any agreements between them are
likely to diminish in importance, because after the patents expire new
competitors would have a free hand in foreign as well as domestic markets.
The original United States producer of tar-acid resins set up or
licensed companies to manufacture in a number of foreign countries. The
urea-formaldehyde process was developed in Europe and the first American
producer was a licensee of a British corporation. Similar arrangements
exist with regard to most of the other resins.
The United States tariff on resins and resin products.
_Synthetic resins._—Imports of tar-acid, alkyd, coumarone and indene,
styrol, adipic, and aniline resins are dutiable under the provisions of
paragraph 28 of the Tariff Act of 1930, which reads in part: “synthetic
phenolic resin and all resinlike products prepared from phenol, cresol,
phthalic anhydride, coumarone, indene, or from any other article or
material provided for in paragraph 27 [coal-tar intermediates] or
[paragraph] 1651 [coal-tar crudes], all these products whether in a
solid, semisolid, or liquid condition; ... 45 per centum ad valorem
[based on American selling price[7] or United States value[8]] and 7
cents per pound.” Where these resins are produced in the United States,
imports are “competitive” and the dutiable value is based upon American
selling price. If the American selling price is higher than the foreign
value, the effect of this method of valuation is to increase the duty
to which imports are subject. The duty of 45 per cent ad valorem and 7
cents per pound was equivalent to 54 per cent ad valorem on the American
selling price of the small imports of coal-tar resins in 1937. If it
could calculated upon foreign value it would be much higher.
Synthetic resins of non-coal-tar origin, except vinyl resins, are
dutiable under paragraph 11, which reads “synthetic gums and resins not
specially provided for, 4 cents per pound and 30 per centum ad valorem”
on foreign value. This rate was the equivalent of 48 per cent ad valorem
upon the small amount of imports in 1937. The most important resins
included are the urea and acrylate resins.
Between 1930 and 1936 there was some doubt whether vinyl resins were
dutiable under paragraph 11 at the rate quoted or under paragraph 2
which provided for “vinyl alcohol ... homologues and polymers of all the
foregoing; ethers, esters, salts and nitrogenous compounds of any of
the foregoing, whether polymerized or unpolymerized, ... not specially
provided for, 6 cents per pound and 30 per centum ad valorem” on foreign
value. But the Canadian trade agreement, effective January 1, 1936,
reduced the rate on vinyl resins under either paragraph 2 or paragraph 11
to 3 cents per pound and 15 percent ad valorem.[9] The reduced rate was
equivalent to 25 percent ad valorem upon the imports in 1937.
Under these rates, imports of synthetic resins, other than vinyl resins,
have been insignificant.[10] After the reduction of duty, imports of
vinyl resins in 1936 amounted to approximately 600,000 pounds, valued at
$145,000 and in 1937 to 650,000 pounds, valued at $200,000. (See table
11.)
_Articles made of synthetic resins._—Laminated products of which
synthetic resin is the chief binding agent and manufactures of such
products are dutiable under paragraph 1539 (b) at the following rates:
15 cents per pound and 25 percent on laminated sheets or plates[11];
50 cents per pound and 40 percent on laminated rods, tubes, blocks,
strips, blanks, or other forms; and 50 cents per pound and 40 percent on
manufactures of such laminated products. Paragraph 1539 (b) also provides
a duty of 50 cents per pound and 40 percent on manufactures of any other
product of which any synthetic resin is the chief binding agent. These
are, for the most part, molded synthetic resin articles. Paragraph 1539
(b) does not cover articles made entirely of synthetic resin (cast
synthetic resin articles). Such articles unless specifically provided for
in the law are dutiable under paragraph 1558 as manufactured articles,
not specially provided for, at 20 percent ad valorem.
A great many articles, which are made in whole or in part of synthetic
resin, are not dutiable under either paragraph 1539 (b) or paragraph
1558. These are articles which are specifically mentioned in other
paragraphs and subject to the duties provided therein. Table 15 lists a
number of them.
TABLE 15.—_Tariff classification and rates of duty in Tariff Act of 1930
on certain articles made of synthetic resin_
------------------------------+-----------+------------------------
Article | Tariff | Rate of duty
| paragraph |
------------------------------+-----------+------------------------
Beads | 1503 | 75 percent ad valorem.
Buttons | 1510 | 45 percent ad valorem.
Dice, dominoes, chessmen, and | |
poker chips | 1512 | 50 percent ad valorem.
Phonograph records | 1542 | 30 percent ad valorem.
Cigar and cigarette holders | 1552 | 5 cents each plus 60
| | percent ad valorem.
Ash trays, humidors, etc. | 1552 | 60 percent ad valorem.
Umbrella handles | 1554 | 75 percent ad valorem.
------------------------------+-----------+------------------------
In general, the available statistics of imports do not segregate imports
of the specified articles made of synthetic resin from those of the same
articles made of other materials; and the same situation is true of
imports of unspecified articles wholly of synthetic resin which enter
under paragraph 1558. Imports of manufactured articles, n. s. p. f. in
which synthetic resin is the chief binding agent under paragraph 1539
have been small. Figures for recent years are given in table 16.
TABLE 16.—_Manufactured articles n. s. p. f. in which synthetic resin is
the chief binding agent: United States imports for consumption, 1931-37_
----------------------------+--------+--------+--------+--------
Type | 1931 | 1932 | 1933 | 1934
----------------------------+--------+--------+--------+--------
_Quantity (pounds)_ | | | |
Laminated products: | | | |
Sheets and plates | | 10 | | 13
Rods, tubes, blocks, etc. | 215 | 13 | |
Manufactures, n. e. s. | 203 | 453 | 787 | 783
Nonlaminated | 17,623 | 8,511 | 5,352 | 5,729
+--------+--------+--------+--------
Total | 18,041 | 8,987 | 6,139 | 6,525
| | | |
_Value (dollars)_ | | | |
Laminated products: | | | |
Sheets and plates | | 9 | | 16
Rods, tubes, blocks, etc. | 612 | 71 | |
Manufactures, n. e. s. | 1,001 | 883 | 2,133 | 2,299
Nonlaminated products | 31,992 | 10,113 | 7,914 | 10,673
+--------+--------+--------+--------
Total | 33,605 | 11,076 | 10,047 | 12,988
----------------------------+--------+--------+--------+--------
----------------------------+--------+--------+----------
Type | 1935 | 1936 | 1937[1]
----------------------------+--------+--------+----------
_Quantity (pounds)_ | | |
Laminated products: | | |
Sheets and plates | | |
Rods, tubes, blocks, etc. | 609 | 514 | 668
Manufactures, n. e. s. | 1,703 | 3,260 | 10,397
Nonlaminated | 8,423 | 8,069 | 8,759
----------------------------+--------+--------+----------
Total | 10,735 | 11,843 | 19,824
| | |
_Value (dollars)_ | | |
Laminated products: | | |
Sheets and plates | | |
Rods, tubes, blocks, etc. | 579 | 1,329 | 1,920
Manufactures, n. e. s. | 3,778 | 9,468 | 39,232
Nonlaminated products | 11,064 | 10,846 | 18,001
----------------------------+--------+--------+----------
Total | 15,421 | 21,643 | 59,153
----------------------------+--------+--------+----------
[1] Preliminary.
Source: Compiled from Department of Commerce statistics.
14. SYNTHETIC RESIN PRICES, PROPERTIES, AND USES