Compounding extruder suppliers report U.S. business was flat or down in 2019, reflecting a weaker automotive business and some general delays in capital investments — but recycling lines and turnkey systems are holding up.
Meanwhile, big extrusion lines for manufacturing polyolefins have been a bright spot.
Even though several compounding equipment makers say the market is more difficult, they don't see a return to the big cyclical swings that the sector experienced before the Great Recession of 2008-09.
Spending on compounding machinery is not falling off a cliff, but it's not robust either, said Charlie Martin, president and general manager of Leistritz Extrusion in Somerville, N.J.
"If I had to describe the compounding extruder market in one word, it would be 'interesting,'" he said. "The market was on the rise for a few years since the recession. But this year it's down."
For Leistritz, sales to small- to medium-sized compounders have been pretty good, "but the larger companies have tended to put projects on hold, and I think it's due to uncertainty from a global perspective; they don't know where to make the investments."
"So we've seen a lot of big companies putting investment on the back burner," he said.
Martin has tracked the history of U.S. sales of twin-screw compounding extruders in a presidential election year, which comes up again next year.
"It doesn't really matter who wins, it seems the business comes back. But for the year before the election, people hold back," he said.
Martin said a good area of growth for Leistritz is extruders for value-added recycling, in-line compounding, medical devices and packaging. The company is also a player in direct extrusion for pharmaceuticals.
"It's not a big business, but it's a good business," he said.
Steer America Inc.'s business in 2019 is similar to the year before, Mike Millsaps, chief operating officer of the facility in Uniontown, Ohio, said.
"There has been some project holdbacks," he said. "I think most of that is due to the potential tariff issue and the geopolitical issues because there are no other indicators.
"There was plenty of money out there; they were just holding onto it," Millsaps said. Replacement parts have remained strong, but sales of new twin-screw compounding lines seem delayed.
An ongoing push for recycled plastics will continue to spur investment, he said. Bio-based resins also are a good niche market for Steer America.
But Millsaps said the company's customers in automotive are seeing a slowdown.
Turnkey systems are a solid area, especially since some compounders have downsized on skilled people, Millsaps said: "There has been a steady increase in turnkey systems. We have seen that."
Coperion is part of publicly traded Hillenbrand Inc. In Hillenbrand's year-end conference call Nov. 14, President and CEO Joe Raver said that Coperion has experienced consistent strength in large projects for making polyethylene and polypropylene, as well as production of engineering resins.
"The outlook for large polyolefins systems remains positive," Raver said, especially for PE in the United States, in part from shale gas production, and in Asia for PP.
Raver said Coperion has a very good backlog, moving into 2020. Coperion is in Sewell, N.J.
"We currently see softness driven by the automotive industry," Raver said in the conference call. But he added, "We expect demand for plastics to continue to grow in the long run" because of lightweighting.
Farrel Pomini has another good year in 2019, said Paul Lloyd, business unit director. "We're finding quite a lot of specialized projects," he said.
Hot markets for the company in Ansonia, Conn., include luxury vinyl flooring — where Farrel Pomini extrusion lines compound polyethylene backing — and decking boards that blend a small amount of recycled plastic into the main plank, or sandwich a layer of recycled material between two virgin layers.
Lloyd said business is also coming from smaller compounders of color masterbatch and filled material for thermoforming.
He expects 2020 to be similar to this year for Farrel Pomini, with some growth, although the overall market will probably be slightly down.
"Our backlogs going into next year are stronger than the backlog going into this year," Lloyd said.