Officials at Chemical Market Resources Inc. are mapping the future for specialty polyolefins, polyolefin elastomers and plastomers.
The Houston-based consulting firm recently has completed several multiclient studies — as well as more specialized work — focused on those materials.
“The U.S. market for these materials is somewhat saturated, but there's growth around the world, because other countries want them,” CMR President Balaji Singh said in a recent interview in Houston.
Singh added that although the U.S. will continue to export commodity resins, the more specialized materials that CMR focuses on likely will be made closer to where market demand is. Most often, demand for these higher-margin materials is coming from Asia.
Singh cited South Korea as a country that's developing its own specialty resin plants. He also pointed out a recent joint venture undertaken in Thailand by American plastics and chemicals giant Dow Chemical Co. and Thai conglomerate Siam Cement Group.
Market analyst Nidhi Puri pointed out that South Korean elastomer makers in particular were selling into the Chinese automotive market. Elastomer demand in China is growing at a rate of 15 percent per year, she said.
It's important to track changes in specialty markets because of how they can change over time, market analyst Vipool Bhatt said. For example, he said metallocene grades of polyethylene at one time were expected to dominate the market, but now account for just 17 percent of global LLDPE demand. That's a solid total, but far from domination.
“Metallocenes have really good properties, but those original expectations weren't realistic,” added market analyst Clifford Lee, who held research positions with Equistar Chemicals and Formosa Plastics Corp. USA before joining CMR.
The automotive market currently is the biggest driver for specialty polyolefins and TPEs, Singh said. That sector can account for as much as 75 percent of TPE demand, according to market analyst Ashish Chitalia. Hose applications also are seeing solid growth, while thermoplastic vulcanizates are making inroads into medical tubing.
But, as has been the case for many years, specialty plastics are challenged to compete with PVC on cost in medical and other applications, Singh said.
As the global economy continues its slow recovery, Bhatt said plastics processors seem to be more interested in finding solutions by using different additives with specialty plastics they're already using than they are in switching to new materials. Increasing amounts of development work for these materials also is being done outside of North America, he added.
North America's ongoing shale gas boom also would have less effect on specialty polyolefins than it will on commodity grades of PE and PP, Chitalia said. That's because specialties tend to be produced and sold in smaller amounts, where volume isn't as much of an issue.
Singh listed Dow — with brands such as Affinity, Engage and Versify — and ExxonMobil Chemical Co. — with its Exact and Vistamaxx lines — as leaders in the growing field of specialty polyolefins and elastomers.
CMR currently has global multiclient studies available on high ethylene vinyl acetate copolymers, acid copolymers and ionomers and high density and medium density PE. By the end of July, the firm will complete similar global studies on metallocene plastomers and elastomers and metallocene linear low density PE.
A larger CMR study on metallocene polyolefins is expected to be available early in the fourth quarter.
