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A monthly compilation of SRIC
report abstracts and news
June 2008
CEH Marketing Research Report Abstract
ACRYLONITRILE-BUTADIENE-STYRENE RESINS
By Emanuel V. Ormonde and Kazuteru Yokose
Acrylonitrile-butadiene-styrene resins (ABS) are the largest-volume engineering thermoplastic resin. ABS is a bridge between
commodity plastics (e.g., polystyrene) and higher-performance engineering thermoplastics (e.g., polycarbonate). ABS resins
are composed mainly of styrene (over 50%) and varying amounts of butadiene and acrylonitrile. The styrene base provides
rigidity and ease of processability and acrylonitrile offers chemical resistance and heat stability. The butadiene portion of ABS
supplies toughness and impact strength. The composition of ABS resins can vary widely, allowing the production of many
different grades which can thus be tailored for different end-use applications.
Large-volume applications for ABS resins include appliance parts (including electrical/electronics) and automotive/
transportation uses. Approximately 60% of total world consumption of ABS resins was for these two main end uses. In these
markets, ABS competes with specialty thermoplastics such as polycarbonates, as well as with commodity polymers such as
polyvinyl chloride and polypropylene resins. Additionally, ABS resins are frequently used in polymer blends, notably with
polycarbonate (PC/ABS) for many differing applications.
The following pie chart shows world consumption of ABS resins:
World Consumption of ABS Resins—2007
Western
Europe
Other
North
America
Asia
The major producing regions for ABS resins are North America, Western Europe and Asia (including Japan). China, Taiwan
and the Republic of Korea represent about 82% of Asian capacity. Taiwan’s Chi Mei Corporation is the world leader in terms of
ABS capacity and production.
(For the complete marketing research report on ACRYLONITRILE-BUTADIENE-STYRENE RESINS, visit this report’s home page or see p.
580.0180 A of the Chemical Economics Handbook.)
SRI Consulting ● Menlo Park, California 94025

June 2008
Chemical Industries Newsletter
CEH Marketing Research Report Abstract
CHLORINATED METHANES
By James Glauser with Chiyo Funada
This report covers the four chlorinated methanes—methyl chloride, methylene chloride, chloroform and carbon tetrachloride
(CTC). These chlorinated methanes are chiefly used as precursors—methyl chloride for silicones and other materials,
methylene chloride for its solvent properties, chloroform for hydrochlorofluorocarbon-22 (HCFC-22) and CTC for
chlorofluorocarbons-11 and -12 (CFC-11 and CFC-12).
Most of the growth forecast for chlorinated methanes is in Asian countries (China in particular), while demand will decline in
developed countries due to Montreal Protocol legislation on fluorocarbons. Other than in Asia, which will continue to see
growth in HCFC-22 production past 2010, a major transition to HFC-32 (using methylene chloride) and HFC-245fa and HFC-
365mfc (using carbon tetrachloride) will occur globally in developed countries.
The following pie charts show world consumption of these four chlorinated methanes.
World Consumption of Methyl Chloride—2007
C/E Europe
India
Taiwan
Other
Rep. of Korea
Thailand
Japan
United
States
World Consumption of Methylene Chloride—2007
Thailand
Mexico
Other Asia
Taiwan
Rep. of Korea
Middle East/Africa
C/E Europe
Central/South
America
India
Other
China
China
Japan
Western
Europe
United
States
Western
Europe
World Consumption of Chloroform—2007
Rep. of Korea
C/E Europe
Mexico
India
Other
Oceania
Japan
World Consumption of Carbon Tetrachloride—2007
India
Mexico
C/E Europe Central/South America
Japan
Western
Europe
United
States
China
China
Western
Europe
United
States
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Worldwide, government regulations in developed countries have had a significant impact on the demand and use of
chlorinated solvents in the past quarter century. Chlorinated methanes have been somewhat less affected than other types of
chlorinated products (e.g., chlorinated ethanes), since they are used to a large extent as intermediates. Except for methylene
chloride, workers and the general public are usually not exposed to chlorinated methanes.
In September 2007, Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer agreed to speed up the
phaseout of hydrofluorocarbons (HCFCs). HCFCs were meant to replace chlorofluorocarbons (CFCs), but have been
identified as a greenhouse gas (GHG). The accelerated phaseout requires developed nations to phase out HCFC by 2020,
from 2040 in the original treaty. The new agreement freezes production of HCFCs at 2013 levels. In addition, developed
countries have agreed to reduce production and consumption by 75% by 2010 and 90% by 2015, with the final phaseout in
2020. Developing countries have agreed to cut production and consumption by 10% in 2015, by 35% by 2020, and 67.5% by
2025, with final phaseout in 2030. A small amount, 2.5%, will be allowed in developing countries during the 2030–2040 period
for “servicing” purposes.
By 2010, HCFC-22 (R-22) producers will have to comply with the U.S. EPA’s HCFC consumption and production limits of the
Montreal Protocol. The question is whether consumers will switch to the more expensive HFC blend–based equipment unless
absolutely forced to. There currently is no ban on selling R-22-based AC/refrigerant equipment. Only equipment manufactured
after 2010 cannot be filled with virgin R-22. If AC/refrigerant producers stockpile equipment, they can continue to purchase R-
22 for the first fill, which may drive demand forward, within EPA limits, for virgin R-22 or for reclaimed R-22 (of which there is
very little today). The greatest share of consumption is the service demand for existing equipment.
(For the complete marketing research report on CHLORINATED METHANES, visit this report’s home page or see p. 635.2000 A of the
Chemical Economics Handbook.)
CEH Marketing Research Report Abstract
CUMENE
By Elvira O. Camara Greiner
Essentially all cumene worldwide is consumed for the production of phenol and acetone. As a result, demand for cumene is
strongly tied to the phenol market. Trade in cumene accounts for only 4% of world production. The largest exporters of
cumene are the United States (to Germany and the Netherlands) and Japan (to the Republic of Korea). Taiwan also imports
large volumes of cumene for phenol production.
Increased demand for bisphenol A and phenolic resins will result in strong demand for phenol in Asia (excluding Japan). As a
result, consumption of cumene for phenol is forecast to grow rapidly in the region. China is forecast to add significant cumene
capacity during 2007–2012 to supply its phenol/acetone plants that are slated to come on stream during the same period.
Downstream bisphenol A and polycarbonate plants are also planned in the region. The world cumene operating rate was good
in 2007, and as long as phenol/acetone demand remains high for bisphenol A and phenolic resins, the world operating rate
should remain healthy (also taking into consideration the new cumene capacity in the Middle East).
Cumene peroxidation is the largest source of phenol and acetone. Demand for phenol, rather than acetone, determines
capacity utilization. With the exception of bisphenol A, phenol and acetone have no common markets. Historically, phenol has
been the more desirable product. Various alternative phenol processes that bypass acetone have been developed that
typically involve benzene-to-phenol conversion, using different catalysts. However, these new processes are not expected to
affect cumene demand in the very near future.
(For the complete marketing research report on CUMENE, visit this report’s home page or see p. 638.5000 A of the Chemical Economics
Handbook.)
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June 2008
Chemical Industries Newsletter
CEH Marketing Research Report Abstract
FLUOROCARBONS
By Ray K. Will with Hiroaki Mori
The fully halogenated chlorofluorocarbons (CFCs) and the partially halogenated hydrochlorofluorocarbons (HCFCs) (as well
as hydrobromofluorocarbons [HBFCs], the Halons, carbon tetrachloride, methyl chloroform and methyl bromide) are
stratospheric ozone depleters. Depletion of the ozone layer is a critical issue because that layer protects the earth from
unacceptably high levels of ultraviolet radiation. High levels of ultraviolet radiation affect both human health and the
environment through higher incidences of skin cancer, cataracts, immune system suppression, potentially reduced yields of
certain crops, potential damage to aquatic plankton and, thereby, the global food chain, and increased formation of groundlevel
ozone and smog.
Fluorocarbon products that do not contain chlorine and/or bromine (i.e., fully fluorinated and hydrofluorinated [HFC] products)
are not stratospheric ozone depleters and production of these products is not being eliminated by the Montreal Protocol. They
are however, restricted by the U.S. Clean Air Act and must be recovered instead of released to the atmosphere. Similar
national environmental laws implement the Montreal Protocol in the various nations that have ratified the agreement. The
extent to which some HFC fluorocarbons, particularly HFC-134a, contribute to climatic change or global warming has become
the subject of significant environmental concern, particularly in Europe, and raises questions about the continued use of these
ODP-free CFC-replacement chemicals.
As a result of the Montreal Protocol and Kyoto Protocol and subsequent amendments and ratification by individual countries,
there are current and proposed regulations limiting the production, consumption and trade of CFCs, HCFCs and HFCs. Over
the past two decades, the global fluorocarbons market has undergone a number of major transitions toward a greater use of
non-ozone-depleting HFCs and non-global-warming, nonfluorocarbon alternatives in emissive applications.
The following pie chart shows world consumption of fluorocarbons in 2007:
World Consumption of Fluorocarbons—2007
Central/South America Other
Japan
Other
Asia
North
America
Europe
China
Consumption of fluorocarbons in the largest market segment, refrigeration and air-conditioning, has been negatively impacted
by the following:
• Prevention of fluorocarbon escape from refrigeration and air-conditioning systems
• Bans on fluorocarbon venting during system maintenance
• Reuse (recycling) of fluorocarbons
• Use of nonfluorocarbon alternatives in refrigeration such as ammonia and hydrocarbons (i.e., isobutane)
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Overall, the segment has many alternatives for the now-banned CFCs and soon-to-be-banned HCFCs in both new equipment
and for servicing existing equipment. Non-fluorocarbon-based products, such as hydrocarbons, have been introduced and are
now the established standard in Europe and Japan for home refrigeration. The major alternative for CFC-12 in vehicle airconditioning
as well as home refrigeration in the United States, HFC-134a, grew strongly in the late 1990s, as the developed
countries adopted this alternative to CFC-12. In 2003–2007, HFC-134a consumption in Japan declined, while in Europe and
North America, consumption increased. In developing countries, consumption caused by the transition to HFC-134a from
CFC-12 has generally lagged behind that of developed countries, except in China, where growth in the production of
automobiles has caused strong HFC-134a consumption for mobile air-conditioning.
Over the next five years, North American consumption of fluorocarbons will increase at a moderate average annual rate while
the European market is expected to decline slowly; Japanese consumption will grow slowly. China is the world’s fastest
growing fluorocarbon market.
Compared with the United States, the European Union has been significantly more aggressive in its production reduction and
scheduled reduction of HCFC production, and it is implementing restrictions on the use of HFCs in compliance with Kyoto
Protocol goals to limit the emissions of global warming gases. The largest-volume fluorocarbons produced in Europe in 2007
were HCFC-22, HFC-134a, HCFC-141b, HCFC-142b and HFC-365mfc.
In 2007, the largest-volume fluorocarbon used as a refrigerant and coolant in Europe was HFC-134a, followed by HCFC-22,
then blends based on HFC-143a, HFC-152a, HFC-125 and HFC-32. HFC-134a will be banned from automotive air
conditioners in new vehicle models in 2011.
Despite the 1996 production ban in developed countries, a continuing availability of CFCs has dampened the demand for CFC
alternatives; however, this market is approaching insignificance as air-conditioning and refrigeration equipment ages to
obsolescence and the energy efficiency of new equipment makes replacement an attractive option for equipment using CFCs.
In the United States, stockpiled and recycled CFCs have allowed the continued operation of older refrigeration and airconditioning
equipment.
Chinese production of fluorocarbons has more than doubled over the last five years. In 2007 China was the world’s largest
producer of HCFC-22 and ranked second to the United States in total fluorocarbon production, having surpassed Europe and
Japan. China has rapidly emerged as the world’s second-largest market for fluorocarbons after the United States. China is
different from the other major fluorocarbon consumers—the United States, Europe and Japan—because it is classified as a
developing country and as such, can rely on HCFCs longer than the developed countries, as allowed under the Montreal
Protocol.
Consumption in China’s largest market segment, refrigeration and air-conditioning, is growing quickly. A major portion of
China’s domestic refrigeration and air-conditioning equipment still uses HCFC-22, unlike the use of HFC-134a for the same
purposes in the United States. Hydrocarbon refrigerants also account for a significant portion of China’s household
refrigeration. As much as 85% of China’s HFC-134a consumption is used in the domestic automobile industry for mobile airconditioning.
(For the complete marketing research report on FLUOROCARBONS, visit this report’s home page or see p. 543.7000 A of the Chemical
Economics Handbook.)
CEH Marketing Research Report Abstract
LINEAR LOW-DENSITY POLYETHYLENE (LLDPE) RESINS
By Andrea V. Borruso
The world polyethylene (PE) business is undergoing rather extensive restructuring and consolidation. A number of mergers
and acquisitions, alliances and joint ventures have recently taken place, designed to improve competitiveness, reduce costs,
expand scale, enhance market position and expand geographic coverage.
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June 2008
Chemical Industries Newsletter
In addition, the construction of new projects in the Middle East and China in the last three years increases fears from existing
producers outside the low-feedstock-cost region that a major downturn will occur when all the new capacity is on stream by
2009–2010.
The increasing cost of ethylene, driven by a sustained high crude oil price and the inability of converters to pass on the full
extent of such large price increases, makes the traditional margin fluctuations a thing of the past with expectations that
upstream integration is becoming an essential component of the economic success of PE operations outside the lowfeedstock-cost
areas.
In the current new business model, an asset foothold in the Middle East has become an essential component of business
success, while owning technology and a large economy of scale have become a common goal for most producers.
Consolidation continues to be one of the leading issues facing the industry. It is a natural response to economic conditions that
occur as products become commodities and interact with business cycles. The result of consolidation is fewer and larger
players and less fragmentation and an increasing focus on technical competencies.
The short-term outlook for PE indicates that from the middle of 2008, LDPE, HDPE and LLDPE will have increments of
capacity larger than increments of demand, with the result of a declining utilization rate. LDPE and HDPE will be the two
products in larger oversupply, while LLDPE shows the best supply/demand balance among the three.
This report provides historical data on linear low-density polyethylene (LLDPE) production and consumption with 2007 as the
base year for supply and demand information and a forecast of production capacity and consumption to 2012. Geographical
coverage is focused on North America, Western and Central/Eastern Europe, Japan and the Middle East. Summaries for
LLDPE supply/demand data are included for Central and South America, Africa, Other Asia and Oceania. Many producing and
consuming country official statistics, particularly trade, still do not distinguish between LLDPE and low-density polyethylene
(LDPE) for reporting purposes and combine the two as LDPE. This report provides product balance LLDPE-only statistics.
Capacity reporting also presents some complexity due to the allocation factor of the swing capacity to LLDPE and HDPE for
each plant. While all the capacity tables report the total swing capacity, the LLDPE allocated capacity has been reported in
summary in each country table.
LLDPE has established itself as the third major member of the world polyethylene business along with LDPE and HDPE. The
following pie chart shows world consumption of LLDPE:
World Consumption of LLDPE—2007
Africa
Mexico
Central/Eastern Europe Oceania
Canada
Middle East
Japan
Central/South
America
China
Other Asia
United
States
Western
Europe
The largest influence on future global LLDPE growth rates will be world economic growth. The replacement of LDPE down to
hard-core levels is now limited to Asia and the rest of the world, as in North and South America, Europe and Japan such
penetration appears to have substantially slowed. The fast growth of catalyst development activity has also created the
possibility of penetrating new nonpolyethylene markets (such as PVC, metals and paper), some of which may include highervalue
products. Material substitution will continue and new LLDPE products will create additional market opportunities. One
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Chemical Industries Newsletter June 2008
offset to volume growth is the continuing trend toward downgauging, which is expected to have a small negative impact on
consumption growth.
World demand should be sustained by good growth for LLDPE and moderate growth for PE. However, the International
Monetary Fund (IMF) has been forecasting a slowing of economic growth in the world during 2007–2010, which in conjunction
with the impact of high oil prices will have a negative effect on the demand growth rate. Reasonably good market growth is
expected, built on consumer confidence in the world’s ability to recover after the Iraq war.
(For the complete marketing research report on LINEAR LOW-DENSITY POLYETHYLENE [LLDPE] RESINS, visit this report’s home page or
see p. 580.1320 A of the Chemical Economics Handbook.)
CEH Marketing Research Report Abstract
METHANOL
By Guillermo A. Saade
Over the last two decades, a major shift in regional methanol capacity and production has occurred. Countries with large
reserves of natural gas and often limited domestic consumption have built world-scale methanol facilities to monetize their lowcost
natural gas. The largest producing region/country in 2007 was China; in 2012, it will continue to have the largest capacity
and be the largest producer.
Another significant factor is that the size of the new mega-methanol plants (1.0–2.0 million metric tons per year) is much larger
than existing plants. Thus, they will have reduced fixed costs, as well as greatly reduced natural gas costs due to strategically
located feedstock giving a significant cost advantage. This will drive down the cost of methanol, and cause major shifts in trade
patterns. Locations for these large new methanol plants are (or will be) Iran, Saudi Arabia, Oman, and Trinidad and Tobago.
These natural gas–advantaged countries export much of their product to developed regions such as North America, Western
Europe and Japan. Consequently, producers in the more economically developed regions have shut down inefficient methanol
capacity as cheaper imports have become more readily available. For example, Japan, once a major producer, now has no
operating capacity. North American capacity accounted for 50% of world capacity as recently as the mid-1980s, but in 2007,
accounted for less than 2%. This trend will continue, and in some regions, the effective capacity will be different from the
nameplate capacity, as a result of expected idling of capacity.
The following pie chart shows world consumption of methanol:
World Consumption of Methanol—2007
Canada
Africa
Central/South America Other
Japan
Central/Eastern
Europe
Other Asia
China
Middle East
United
States
Western
Europe
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Worldwide, formaldehyde production is the largest consumer of methanol. This demand is driven by the construction industry
since formaldehyde is used primarily to produce adhesives for the manufacture of various construction board products.
Historically, the major end product has been plywood, but in developed countries, demand is also driven by the expanding use
of engineering board products such as OSB (oriented strandboard). These wood composite products require more
formaldehyde-based resin per square foot of board than plywood. Demand for formaldehyde is highly dependent on general
economic conditions, and, as an example, a slowdown in construction can considerably reduce formaldehyde demand.
The second-largest market for methanol worldwide is methyl tertiary-butyl ether (MTBE). In the United States, consumption
increased substantially when the Clean Air Act Amendments (CAAA) of 1990 mandated that oxygenated compounds be
added to gasoline as one aspect of a program to alleviate air pollution. In recent years, MTBE has come under environmental
attack, primarily because it has been found in groundwater that has come into contact with leaking underground gasoline
tanks. California—formerly the leading consumer of MTBE—banned the use of MTBE at the end of 2003 and several states
followed suit. Methanol consumption for MTBE has been on the decline in the United States since 1999 and it is likely that
MTBE’s consumption will decline further at a steady level, supported only by export-driven demand.
Acetic acid is the third-largest methanol derivative. A major portion of acetic acid is consumed for the production of vinyl
acetate monomer (VAM). Demand for acetic acid tracks the demand for VAM, which (globally) is projected to grow at a
moderate average annual rate from 2007 to 2012.
(For the complete marketing research report on METHANOL, visit this report’s home page or see p. 674.5000 A of the Chemical Economics
Handbook.)
CEH Product Review Abstract
NATURAL GAS
By Sean Davis
As world energy demand increases and alternative energy sources such as water, wind and solar power fail to make
significant enough contributions to ease emissions from traditional fossil fuel–derived manufacturing, more countries are
deferring to readily abundant, cleaner-burning natural gas to meet domestic energy requirements. The five countries with the
largest natural gas reserves are (in order) Russia, Iran, Qatar, Saudi Arabia and the United States; these countries account for
almost 65% of world proved natural gas reserves.
Estimates of reserves can change over time as production depletes the reserve base. New reserve additions result from
exploration in new areas as well as extension of existing reserves through drilling. In regions of the world such as Russia, the
Middle East and Asia Pacific, the potential to add new reserves through exploration activities is very significant. Although oil
has been the historical focus of the bulk of world exploration activity, the upside potential of the natural gas resource base
continues to attract the interest of the international gas majors. Lower costs, higher efficiencies and environmental advantages
have made natural gas a viable energy source.
North America was the largest natural gas–consuming region in 2007, followed closely by Central and Eastern Europe and
Asia and Oceania, which surpassed Western European consumption beginning in 2006. Consumption for both Asia/Oceania
and the Middle East has grown significantly in the past few years and is forecast to continue further development through
2012.
In 2007, U.S. domestic natural gas production accounted for 80% of total U.S. natural gas consumption. Imports of natural gas
originate mainly from Canada. Over the past few years LNG imports from Egypt and Nigeria have increased.
Overall, Western European consumption has continued to increase because of increases in demand in the industrial and
power generating sectors, and steady increases in all other sectors. Currently, natural gas accounts for about a quarter of
Western Europe’s total energy usage. It is expected that gas consumption will continue to increase in Western Europe.
The following pie chart shows world consumption of natural gas:
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World Consumption of Natural Gas—2007
Central/South America
Middle East
Africa
North
America
Western
Europe
Asia/
Oceania
Central/Eastern
Europe
Russia remains by far the largest producer of natural gas in Eastern Europe. Approximately 25% of total natural gas output is
exported to Western Europe to meet declining supply. Further expansion and development of transmission lines between
Russia, other CIS countries and Western Europe will lead to further growth; however, current growth is slow.
(For the complete product review on NATURAL GAS, visit this report’s home page or see p. 229.2000 A of the Chemical Economics
Handbook.)
CEH Marketing Research Report Abstract
POLYETHYLENE TEREPHTHALATE (PET)
SOLID-STATE RESINS
By Elvira O. Camara Greiner with Issho K. Nakamura
Development and growth of the global PET solid-state resin market since 1996 has been impressive. Thirty-two years after
their introduction in the mid-1970s, global consumption of these resins continues to grow at high single-digit rates. Three
regions (North America, Europe and Asia) accounted for the majority of world production and consumption.
Asia and the Middle East are expected to achieve double-digit consumption growth through 2012. Eastern Europe and South
America have created import opportunities. Asian and Middle Eastern producers are expected to be the major suppliers of
PET exports to Eastern Europe, Central and South America, and Oceania. Continued overcapacity and relatively lower
feedstock costs compared with North America and Western Europe will be the primary drivers of Asian exports.
The last remaining untapped major market for PET is beer packaging, but substantial conversion has yet to materialize. Use of
PET beer bottles is gaining strength primarily in developing countries, such as Russia and China. In China, poor glass quality
and the low capital barrier for PET have led to an increase in the number of beer bottles produced over the years. Globally,
beer accounts for approximately 5% of the PET beverage market and of that, Russia alone consumes approximately 60%. In
the United States, use of PET in beer packaging is insignificant and confined to niche markets. But in Western Europe, strong
PET growth is expected from beer conversion. Bottle resins for beer have been embraced in Germany and the switch from
glass could support moderate double-digit PET consumption growth rates.
The following pie chart shows world consumption of PET solid-state resins:
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Chemical Industries Newsletter
World Consumption of PET Solid-State Resins—2007
Taiwan
Oceania Thailand
Canada
India Other
Africa
United
Japan
States
Middle East
Mexico
Central/South
America
Central/Eastern
Europe
China
Western
Europe
PET bottle resin is a very important material driving growth in the developed economies, but growth of PET fiber remains
dominant in terms of total polyester. PET growth is driven differently depending on the geographic region. In North America
and Western Europe, PET growth is associated primarily with PET bottle resins; demand for PET fiber has been in decline
since the late 1990s. PET growth in most other regions is primarily associated with PET fiber. Global polyester growth will
continue to be driven by Asia and, more specifically, by the Chinese market.
Because of persistent low margins, the global PET industry saw considerable consolidation in the last two years. Future
success for improved margins will come from new and more economical technologies, perhaps more consolidation,
rationalization of uneconomical capacity, vertical integration, and larger economies of scale.
(For the complete marketing research report on POLYETHYLENE TEREPHTHALATE [PET] SOLID-STATE RESINS, visit this report’s home
page or see p. 580.1180 A of the Chemical Economics Handbook.)
SCUP Report Abstract
OVERVIEW OF THE SPECIALTY CHEMICALS INDUSTRY
By Uwe Fink with Yosuke Ishikawa, Wei Yang and Ray Will
Specialty chemicals are produced by a complex, interlinked industry. In the strictest sense, specialty chemicals are chemical
products that are sold on the basis of their performance, rather than for their composition. They can be single-chemical entities
or formulations/combinations of several chemicals whose composition sharply influences the performance and processing of
the customer’s product. Products and services in the specialty chemicals industry require intensive knowledge and powerful
innovation.
Commodity chemicals, at the other extreme, are sold strictly on the basis of their chemical composition. They are singlechemical
entities. The commodity chemical product of one supplier is generally readily interchangeable with that of any other.
Market-oriented specialty chemicals are groups of chemicals that are utilized by a specific industry or market, such as
electronic chemicals or oil field chemicals. Functional specialty chemicals, on the other hand, are groups of products that serve
the same defined function, such as adhesives, antioxidants or biocides. Technology-oriented specialty chemicals include
nanochemicals and materials—particles, layers or composites—where at least one dimension is in the nanometer range, and
biotechnology products, which include chemicals that are synthesized, modified and isolated from biomass by man or nature.
In several specialty chemical markets prices have been falling, especially when volumes have increased and production has
shifted overseas to places like China/Southeast Asia. This is a natural tendency of shifting from specialty to commodity
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Chemical Industries Newsletter June 2008
chemicals over time. In the last three years, energy and raw material input prices have risen considerably; however, these cost
increases have not always been passed on to customers through price increases.
Over the last decade, the specialty chemicals industry has experienced slower growth and lower overall profitability within a
more competitive environment than in the preceding decade. Between 2007 and 2012, the overall growth rate is forecast to be
moderate.
For the United States, Western Europe and Japan, the following segments are expected to experience good growth: specialty
polymers, advanced ceramic materials, separation membranes, nutraceutical ingredients, and nanoscale chemicals. High
growth rates are found in various subsegments.
Five industries or subsegments in the three major regions are stagnating or declining—anticorrosion coatings, photographic
chemicals, pesticides, textile chemicals and synthetic dyes. Pesticides is the largest of these industries. Contributing to the
stagnation of pesticide consumption is the increased planting of genetically modified (GM) crops. The planted area for GM
crops increased to 100 million hectares, an increase of more than 10%. Chemical consumption for photographic film
manufacturing and development is forecast to decline significantly through 2012 because of the changeover from analog to
digital cameras in consumer photography. Total sales of photofinishing solutions are expected to decline slowly through 2012.
(For the complete June 2008 report, OVERVIEW OF THE SPECIALTY CHEMICALS INDUSTRY, visit this report’s home page or see vol. 2 of
Specialty Chemicals—Strategies for Success.)
SCUP REPORTS SCHEDULED FOR 2008
Report Title Author Status
Specialty Chemicals Business Overview Uwe Fink Published
Nutraceuticals Laszlo Somogyi Published
High Performance Anticorrosion Coatings Eric Linak Published
High Performance Thermoplastics Fred Hajduk In production
Lube Oil Additives Stefan Müller In production
Water Management Ray Will In preparation
Thermosetting Powder Coatings Eric Linak In production
Electronic Chemicals: Semiconductor/IC Process Chemicals Uwe Fink In preparation
Oil Field Chemicals Peter Allison In preparation
Food Additives Laszlo Somogyi In preparation
Flame Retardants Uwe Fink In preparation
Biocides Stefan Müller In preparation
Radiation Curable Coatings Uwe Fink In preparation
To view a list of SCUP reports for sale separately, please see our website at
http://www.sriconsulting.com/SCUP/Public/Reports/ . For additional information, please contact:
R. J. Chang, Director
Specialty Chemicals Update Program
SRI Consulting
4300 Bohannon Drive, Suite 200
Menlo Park, CA 94025
Tel. (650) 384-4300 Fax: (650) 330-1149
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Chemical Industries Newsletter
CEH REPORTS AND PRODUCT
REVIEWS IN PREPARATION
Report Title
Acrylonitrile
Air Separation Gases
Animal Feeds: Phosphate Suppl.
Butylenes
Carbon Black
Chlorine/Sodium Hydroxide
Controlled Release Fertilizers
Cyclohexane
Cyclohexanol/Cyclohexanone
Ethylene–Vinyl Alcohol Resins
Explosives
Fluoropolymers
Glycerin
Inorganic Pigments
Monochloroacetic Acid
Nitrile Elastomers
Normal Paraffins
Nylon Fibers
Organometallics
Petrochemical Industry Overview
Phenol
Plastics Recycling
Polyacetal Resins
Polyamide Elastomers
Polycarbonate Resins
Polyphenylene Sulfide
Polypropylene Resins
Polystyrene
Polyvinyl Acetate
Propylene
SAN Resins
Silicates and Silicas
Sodium Chloride
Sorbitol
Specialty Inorganic Fibers
Specialty Organic Fibers
Unsaturated Polyester Resins
Vinyl Acetate
Zeolites
Author
Barbara Sesto
Bala Suresh
Jim Glauser
Sean Davis
Jim Glauser
Eric Linak
Mike Malveda
Vimala Francis
Henry Chinn
Henry Chinn
Stefan Schlag
Ray Will
Ralf Gubler
Ray Will
Vimala Francis
Uwe Löchner
Bob Modler
Mike Malveda
Bala Suresh
Sean Davis
Elvira Greiner
Jim Glauser
Thomas Kälin
Uwe Löchner
Henry Chinn
RJ Chang
Andrea Borruso
Koon-Ling Ring
Henry Chinn
Michael Devanney
Emanuel Ormonde
Don Lauriente
Stefan Schlag
Sebastian Bizzari
Bala Suresh
Fred Hajduk
Henry Chinn
Henry Chinn
Sean Davis
This list is provided for the benefit of Chemical Economics
Handbook users who may simultaneously be undertaking their
own studies in these areas. Clients are welcome to write or call
us in order to discuss the work in progress.
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Chemical Industries Newsletter June 2008
CHEMICAL INDUSTRIES NEWSLETTER
The Chemical Industries Newsletter is published monthly by SRI Consulting. The contents of the Newsletter are drawn from current research
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Chemical Economics Handbook..................................Koon-Ling Ring, Director
Directory of Chemical Producers....................................Carolyn Read, Director
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Production/Databases ...................................................Steven F. Read, Director
Specialty Chemicals Update Program..................................RJ Chang, Director
World Petrochemicals............................................................Ed Gartner, Director
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Chemical Industries Newsletter
Ellen Blue, Editor
© 2008 by SRI Consulting.
All rights reserved. Unauthorized reproduction prohibited.
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