Chemical Profile

05 November 2001 00:00  [Source: ICB Americas]

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BISPHENOL-A   November 5, 2001

PRODUCER	CAPACITY*
Bayer, Baytown, Tex.	350
Dow, Freeport, Tex.	420
GE Plastics, Burkeville, Ala.	165
GE Plastics, Mount Vernon, Ind.	585
Resolution Performance Products, Deer Park, Tex.	550
Sunoco, Haverhill, Ohio	230
Total	2,300

*Millions of pounds per year of bisphenol-A (4,4-isopropylidene diphenol, or BPA). All US producers make BPA through an acid-catalyzed condensation reaction of phenol with acetone. All companies have captive phenol and acetone supplies for BPA production and all except Sunoco have captive BPA requirements for downstream resins. In 1999, Bayer expanded BPA production at Bayport, Tex., to 350 million pounds, to serve the companyÕs polycarbonate requirements at the site. GE uses captively all of the bisphenol-A produced at its two plants in the manufacture of polycarbonate resins and polyetherimides. Last year, private equity firm Apollo Management acquired the epoxy resins business of Royal Dutch/Shell Group and renamed it Resolution Performance Products. This included the BPA unit in Deer Park, Tex. Early this year, Sunoco acquired Aristech Chemical from Mitsubishi Corp., which included the bisphenol-A business and plant in Haverhill, Ohio. Profile last published 1/4/99; this revision, 11/05/99.

DEMAND
1999: 1.964 billion pounds; 2000: 2.115 billion pounds; 2004: 2.764 billion pounds.
Demand equals production plus imports, which were 18 million pounds in 1999 and 6 million pounds in 2000, less exports, which were 169 million pounds in 1999 and 255 million pounds in 2000.

GROWTH
Historical (1995-2000): 6.9 percent per year; Future: 7 percent per year through 2004.

PRICE
Historical (1995-2000): High, 94c. per pound, list, polycarbonate grade, hopper cars, dlvd.; low, $94c., same basis. Current: 94c., same basis.
Due to the large variation in BPA purchases, the discrepancy between list price and contract price is often quite significant. Contract price for large volume purchases is currently estimated at 50c. to 55c., same basis.

USES
Polycarbonate resins, 68 percent; epoxy resins, 24 percent; miscellaneous, including flame retardants (mainly tetrabromobisphenol-A), unsaturated polyester, polysulfone, polyetherimide and polyarylate resins, 8 percent.

STRENGTH
BPA consumption has more than doubled during the past decade, driven primarily by heavy demand for polycarbonate resins. Automotive applications account for about 20 percent of the total polycarbonate consumption. The resins are used in place of traditional materials such as metal and glass in automotive components. Glazing and sheet uses, such as architectural, security and transportation, make up another 20 percent of polycarbonate consumption. Optical media, including audio compact discs (CDs), CD-ROMs, recordable CDs, and digital versatile disks (DVDs) are the third-largest market for polycarbonate resins, accounting for 15 to 20 percent of the PC market. Polycarbonate consumption for this last sector is currently growing at 14 percent per year. Collectively, polycarbonates for all application areas are growing at slightly more than 8 percent per year and represent 68 percent of BPAÕs end uses.

WEAKNESS
Epoxy resins, which account for 24 percent of BPAÕs end uses, reflect GPD growth. The average annual GDP for the past four quarters is 1.2 percent, and epoxy resins should mirror this, now, and for the short-term future. BPA has, for years, been targeted by environmental groups, which oppose its use in food packaging and other products. A report issued last May by the National Toxicology Program, a division of the National Institutes of Health says there is Òcredible evidenceÓ that possible endocrine disrupters, including BPA, cause human health effects at doses lower than those determined safe by EPA. The report stops short of concluding whether these effects are harmful, however, and NTP says more research is needed. Industry groups, including the American Plastics Council and The American Chemistry Council cite other studies showing contrary results. This controversy has no end in sight and will undoubtedly dampen BPAÕs use in certain consumer products.

OUTLOOK
BPA's growth prospects remain bright, based on the high growth expected for CDs (14 percent) during the next few years and the emergence of new markets, such as polycarbonates for auto glazing to lighten vehicles. Epoxies are projected to grow at a more modest 1 percent annual rate. In the consumer product area, the controversy over BPA leaching will diminish polycarbonate use, and hence diminish BPA's use, in such emotionally sensitive products as baby bottles. Overall, BPA is projected to grow at 7 percent annually, at least through 2004.

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