Markets for polycarbonate, ABS and nylon are battling raw-material issues and demand declines as they head into 2010.
PC growth had been as high as 20 percent in the late 1990s, thanks to red-hot sales of optical media products such as CDs and DVDs, said Chemical Market Associates Inc. market analyst Adrian Beale.
But with the advent of digital downloads in the last decade, optical media sales have been in decline, taking the PC market down with them, he added.
PC “is still searching for that next major application,” Beale said at his firm's World Petrochemical Conference, held March 24-25 in Houston.
Global PC growth should average between 5 and 5.5 percent through 2014. Big capacity bumps should come from Saudi Kayan Petrochemical Co., which is adding 570 million pounds at a new plant in Jubail, Saudi Arabia, and from Leverkusen, Germany-based Bayer AG, which plans to add more than 200 million pounds at a plant in China.
But PC in the short-term will struggle with tightness in raw materials benzene and propylene, which are resulting from lighter natural gas-based feedstocks being used in petrochemical production, instead of ones based on crude oil. CMAI estimated global PC demand at about 7 billion pounds in 2009, with about 53 percent of demand coming from northeast Asia.
In spite of the long-term slump, optical media-grade PC is in short supply right now, prompting increases of as much as 50 percent in the first half of 2010. The upcoming DVD releases of the blockbuster films Avatar and New Moon also may drive short-term optical media demand, Beale said.
PC makers also will continue to pursue auto-window glazing, which could create 55 pounds of new demand per vehicle and increase global PC demand by 50 percent. This potential growth “is why suppliers have spent so much time and effort to develop the [auto glazing] sector,” Beale said.
But he added that PC suppliers also have to be aware of the impact of alleged health risks connected to PC feedstock bisphenol A. Those concerns already have impacted demand for PC baby bottles and could affect bottles for sports applications and 5-gallon water coolers as well.
In ABS, supplies of acrylonitrile and butadiene feedstocks are tight, leading two of North America's three major suppliers to declare force majeure. Price hikes already have hit that market, with more on the way. Beale said prices are expected to remain high through 2011, but will be alleviated somewhat by the arrival of material imported into North America.
Global ABS demand should grow at a 6 percent annual rate through 2014, according to Houston-based CMAI. In 2009, almost 70 percent of global ABS demand came from northeast Asia. About 42 percent of global demand came from the appliance market. Total market demand size was estimated at 14.3 billion pounds.
Beale said that appliance uses — including refrigerator liners, floor care and kitchen electrics — are expected to remain the largest market for ABS in the near future.
For nylon, the feedstock story is somewhat similar, with nylon 6 resin affected by tight benzene and nylon 6/6 resins affected by tight butadiene, according to CMAI market analyst Paul Blanchard.
A major slowdown in auto production — which fell more than 30 percent in North America in 2009 — has had a big impact on the nylon field, since 36 percent of global demand comes from that sector.
China — which accounted for almost 30 percent of world nylon demand last year — helped alleviate lower exports with a “drive a mini-bus to the countryside” incentive program, which led to higher vehicle sales, Blanchard said. And even in a tough market, nylon eked out some growth in non-durable items such as films for meat and cheese.
Longer-term, both materials are expected to bounce back, with nylon 6 averaging 3 percent global demand growth through 2014, and nylon 6/6 faring even better with an 8 percent growth rate during that period, according to CMAI.
“China isn't the only story,” Blanchard said. “The return of the post-recession economy will improve [nylon] demand in North America by 2012.”
He also cited a possible threat to nylon from polypropylene in the auto sector, where Volkswagen recently chose a glass fiber-filled PP grade made by Vienna-based Borealis AG to replace nylon in an air-intake manifold part. The switch was made because the part didn't need nylon's super-high-heat resistance and because PP provided thickness and weight savings, as well as moisture resistance, Blanchard said.
But even with the potential PP threat, nylon continues to make inroads in replacing metal in auto applications.
“Metal replacement is still a prime target,” Blanchard said.
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