Plasticizer Market Expected to Shift
03 June 2002 00:00 [Source: ICB Americas]
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Eastman Chemical Company, effective July 1, will be increasing the
off-list price of a variety of plasticizers by 5 cents in the
Americas. These plasticizers include Eastman's DMP, DEP (standard
and fragrance grade), DBP, DOP, 168, 168-CA, 425, DUP (both
stabilized and unstabilized), DOA (regular and Kosher), TOTM and
The company says this increase is due to the continuing need to
reinvest in facilities and services that help Eastman maintain
continuous and reliable supply. "Prices have declined throughout
the industry for plasticizers," says a company representative.
"Overall supply/demand had been out of balance, and it's returning
to a more balanced state now...[But] it's been [about four] years
since our last plasticizer price increase, and raw materials
haven't been sitting still."
This is coupled, the company says, with the cost of maintaining
necessary quality for end use industries and the continuing need to
invest in and manage regulatory compliant equipment and processes.
"If we're going to stay in the business we have to raise
prices...The [overall plasticizer] business is bad right now. And
we're trying to get it back to the point that it's healthy enough
for us to stay in it and make the investment that we need to keep
the business healthy long term."
The plasticizers market is slated for slow growth. Flexible
(PVC), its leading end use, is struggling in the
wake of increased scrutiny for phthalate-based plasticizers in
medical tubing and packaging. It is in medical applications where
some say phthalate-based plasticizers face the greatest threat from
In 2000, a panel for the National Institute of Environmental Health
Sciences expressed "serious concern" about dioctyl phthalate
as used to make PVC medical tubing and other medical devices for
feeding and medicating critically ill newborn infants as well as
helping them breathe. The panel says that such procedures may lead
to higher-than-normal exposure to DOP, and that that could impair
the development of the male reproductive system. DOP is also known
as di(2-ethylhexyl) phthalate (DEHP).
Meanwhile, DOP was reclassified in Europe last year, which means
that all DOP that is shipped there must now carry the skull and
crossbones symbol. While the reclassification might not necessarily
create a negative impact in and of itself, analysts point out that
many end users do not want to see that symbol. The reclassification
only took place in Europe, where phthalates control 90 percent of
the plasticizers market there, and DOP controls 45 percent of that,
according to the Houston-based consultancy Chemical Market
In North America, there is considered to be a good balance between
DOP and the two other general-purpose plasticizers, diisononyl
phthalate (DINP) and diisodecyl phthalate (DIDP). "In North
America, you had more of a switch over to DINP than in other parts
of the world, but it's really one phthalate for another," says Fred
Gastrock, project manager for additives for the Mount Olive,
N.J.-based consultancy BRG Townsend Inc. Phtha-late esters have
long dominated the market, accounting for about 86 percent of
global consumption in 1999, according to BRG Townsend. Aliphatic
esters (adipates) accounted for 5 percent, polymeric, trimellitate
and epoxy esters accounted for 2 percent each, and other
plasticizers garnered the remaining 5 percent. By value, however,
phthalates accounted for around 75 percent of the market, being the
least expensive plasticizers. Adipates accounted for 7 percent,
polymerics and trimellitates for 5 percent each, epoxies 3 percent
and others 10 percent.
The global demand for plasticizers was in excess of 4.6 million
metric tons or about 10 billion pounds in 2000, according to
Chemical Market Re-sources. The overall global growth rate for
plasticizers is projected at about 2.8 percent per year until about
2006, says the consultancy. Global capacity was divided among the
US at 17 percent, Western Europe 25 percent, Japan 11 percent, the
rest of Asia 34 percent and the rest of the world 13 percent, based
on 1998 estimates, according to Menlo Park, Calif.-based SRI
Consulting. Capacity utilization for that year was 67 percent.
However, because of DOP's (and to some extent DINP's) leading
position as the plasticizer of choice in many applications and the
cost prohibitive nature of any potential replacements, it does not
appear as if DOP will face an immediate threat. "Replacements may
work in small niche areas, or else they're prohibitive in cost,"
says Mr. Gastrock. "Phthalates are being replaced in one segment,
[chewing] toys [for babies], but that is a small segment of a
larger industry, well less than 1 percent of all PVC."
The top three end uses for plasticizers are PVC, polyvinyl butyral
and polyvinyl acetate. PVC accounts for about 85 percent of the
demand in North America, about 88 percent of the demand in Europe
and 80 to 90 percent of the demand in the rest of the world. "PVC
is probably the slowest growing of all the commodity resins," says
Mr. Gastrock, adding that on a global basis rigid PVC is growing
annually in the vicinity of 4 percent, and flexible PVC is growing
at roughly 2 percent.
Plasticizers are only used in flexible PVC (tubing, wire and cable,
and flooring) but not in the rigid PVC used in major construction
applications. "What you want to watch for," says the analyst, "is
if flexible PVC ever gets replaced to a great extent in medical and
packaging applications." Mr. Gastrock points out that medical
applications make up about 10 percent of all flexible PVC
applications, and flexible PVC in turn represents about 30 percent
of all PVC applications. PVC consumption is about 21 or 22 million
metric tons globally.
The largest direct producers or non-toll operators in North America
are ExxonMobil Chemical, with roughly 650 million pounds of
capacity, Eastman Chemical (450 million pounds), Sterling Chemicals
(280 million pounds), Sunoco Chemicals (210 million pounds) and
Solutia (165 million pounds). These five producers account for
about 60 percent of North American plasticizers capacity, says
Chemical Market Resources.
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