Product Profile: Polycarbonate

16 February 2004 00:01  [Source: ICB]

 
Global markets have picked up from the slump in 2001 and future growth prospects still look healthy. But margins remain poorly and below reinvestment levels
Uses

Polycarbonate (PC) is mainly used in glazing and sheet form. Major uses are in optical discs (CDs, DVDs) and automotive headlamps. Other uses are optical applications, portable tool housings, safety helmets, industrial equipment, housing components, household appliances, food storage containers and bottles, computers, electrical and automotive parts, sporting goods, aircraft and missile components. It is also used in compounds or blended with other polymers. PC is available in different grades and can be extruded, blow and injection moulded.

Supply/demand

The global market stood at about 2.3m tonne in 2003. Despite a depressed first half year impacted by the war in Iraq and the outbreak of sudden acute respiratory syndrome (Sars) in Asia, the global market grew by about 7% over 2002 with growth in east European markets being a key driver, according to a major producer. CMAI estimates consumption in Europe reached about 470 000 tonne in 2003, up from around 450 000 tonne in 2002. Although demand increased in 2003, overall global capacity rose by 400 000 tonne and industry operating rates fell to 75-80%.

Demand continues to pick up in early 2004 after an improved second half year. The optical market remains healthy after a very strong quarter four. However, large import volumes from Asia, helped by the cheaper dollar, continue to put European suppliers under great pressure. GE Plastics has completed its 150 000 tonne/year expansion project at Cartagena, Spain, and is planning to start up the new plant by the end of this year.

Pricing

European contract prices slipped in the first quarter of 2004 to €2450-2950/tonne FD NWE for general purpose moulding material. Prices have eroded since the second quarter of last year and producers’ attempts to lift numbers in quarter three met stiff resistance from buyers with levels mainly rolling over and reductions for some accounts. In the US, a 4 cent/lb increase has been posted from 1 March.

Margins have been under severe pressure and have reached unsustainably low levels, say suppliers. Price volatility has instigated a trend amongst buyers to settle longer-term contracts and several consumers are now settling on either six-month or annual deals.

Technology

There are two processes to manufacture PC: interfacial and melt technology. The interfacial polymerisation process involves reacting bisphenol-A (BPA) with phosgene in a solvent. Environmental and cost considerations have forced producers to seek non-phosgene routes. All take the same overall approach where polyermisation relies on the transesterification of diphenyl carbonate with BPA, commonly termed as the melt process as the two-stage polymerisation takes place in the absence of solvents. GE Plastics and Bayer have developed phosgene-free technologies, while Chimei-Asahi, Teijin and Mitsubishi are also developing non-phosgene routes.

Outlook

Demand is expected to improve further in 2004. CMAI predicts global demand growth of 5-8%/year over the next few years, and 5-7%/year in Europe. Optical media growth is still strong but has slowed from about 20%/year to twice that of GDP. Sources expect it will take at least another two to three years for world markets to come into balance and CMAI expects operating rates to reach about 90% by 2008.

China remains the major growth region with annual demand growth still anticipated at double digit figures. Several projects are under way or planned in the country. Japan’s Teijin is building a 50 000 tonne/year plant in Jiaxing, Zhejiang province, China, to start up in April 2005. A further 50 000 tonne/year expansion could be added by 2007. Bayer will start up the first 100 000 tonne/year line of its new plant in Caojing, Shanghai, China, in the second quarter of 2006. The plant is planned to reach its full capacity of 200 000 tonne/year by 2010.

Seven additional projects are planned in China for 2005-2010. A handful are also earmarked for Taiwan including Chimei-Asahi which plans to add a second 75 000 tonne/year line at Tainan by end 2005.

Global polycarbonate capacity, '000 tonne/year
Company Location Capacity
Bayer Antwerp, Belgium 200
Krefeld, Germany 260
Baytown, Texas, US 200
Map Ta Phut, Thailand 170
Carbolux Terni, Italy 20
Chimei-Asahi Tainan, Taiwan 50
Dow Chemical Stade, Germany 125
Freeport, Texas, US 80
Formosa Idemitsu Petrochemical Yunlin, Taiwan 100
GE Plastics Bergen op Zoom, Netherlands 170
Cartagena, Spain 130
Burkville, Alabama, US 190
Mount Vernon, Indiana, US 245
Chiba, Japan 45
Idemitsu Petrochemical Chiba, Japan 47
LG Dow Polycarbonate Yosu, South Korea 70
Mitsubishi Engineering Plastics Kashima, Japan
Kurosaki, Japan
100
40
Policarbonatos do Brazil Camacari, Brazil 15
SamYang Kasei Chonju, South Korea 85
Sumitomo Dow Niihama, Japan 55
Teijin Matsuyama, Japan 120
Teijin Polycarbonate Singapore Pulau Sakra, Singapore 180
Thai Polycarbonate Map Ta Phut, Thailand 60
Source: ECN/CNI






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