Chemical Profile Bisphenol-A

20 December 2004 00:01  [Source: ICB Americas]

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BISPHENOL-A

December 20-27, 2004

PRODUCER

CAPACITY*

Bayer Polymers, Baytown, Tex.

350

Dow Chemical, Freeport, Tex.

420

GE Plastics, Burkeville, Ala.

165

GE Plastics, Mount Vernon, Ind.

585

Resolution Performance Products, Deer Park, Tex.

550

Sunoco Chemicals, 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 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. GE captively uses all of the bisphenol-A produced at its two plants in the manufacture of polycarbonate resins and polyetherimides. In 2001, Sunoco acquired Aristech Chemical from Mitsubishi Corp., which included the bisphenol-A business and plant in Haverhill, Ohio. Resolution Performance Products was formed when the private equity firm Apollo Management acquired the epoxy resins business of Royal Dutch/Shell Group in 2000. The acquisition included the BPA unit in Deer Park, Tex.  Profile last published 11/5/01; this revision, 12/20/04.

DEMAND

2002: 1,970 million pounds; 2003: 1,896 million pounds; 2007: 2,220 million pounds, projected. Demand equals production plus imports (2002: 9.4 million pounds; 2003: 2.1 million pounds) less exports (2002: 113 million pounds; 2003: 153 million pounds).

GROWTH

Historical (1998-2003): 0.2 percent per year; Future: 4 percent per year through 2007.

PRICE

Historical (1998-2003): High, 94c. per pound, list, polycarbonate and epoxy grades, hopper cars, dlvd.; low, 94c. same basis. Current: 94c., same basis. The discrepancy between list price and contract price can be significant; previously as much as 40c. per pound for large users. In 2003, large-volume contract purchases of BPA were estimated to be priced in the neighborhood of 55c. per pound. This year, prices have increased because of tight supply and improved demand. Large-volume users are now estimated to be paying about 76c. per pound.

USES

Polycarbonate resins, 73 percent; epoxy resins, 21 percent; miscellaneous, including flame retardants (mainly tetrabromobisphenol-A), unsaturated polyester, polysulfone, polyetherimide and polyarylate resins, 6 percent.

STRENGTH

The largest market for BPA is polycarbonate (PC) resins, which account for approximately 73 percent of US demand. PC resins consumed in automotive applications, where they are used in place of traditional materials such as metal and glass in automotive components, accounted for about 20 percent of total PC resins demand. Glazing and sheet uses, such as architectural, security and transportation, make up another 20 percent of PC resins consumption. Optical media, including audio CDs, CD-ROMs, recordable CDs and DVDs also account for 20 percent of the PC resins market. PC resins consumption for this sector increased at more than 40 percent per year between 1988 and 2000. PC resins consumption in the optical media sector has slowed considerably, however, it will still provide the highest annual demand growth over the next several years. The aggregate growth of the PC resins sector is expected to be 4.2 percent for the forecast period. The second-largest end use for BPA is epoxy resins, which account for 21 percent of demand. Several types of epoxy resins are produced in the United States. Those based on BPA and epichlorohydrin account for approximately 90 to 95 percent of US production. The recent economic downturn negatively affected many industries that use epoxy resins in surface coatings, fiber-reinforced laminates and composites. From 2000 to 2003, epoxy resin production decreased primarily because of low demand from most of the consuming sectors. This situation has turned around with the recovered economy. Overall demand during the next four years will average 3 percent per year, primarily because of epoxy resin growth in surface coatings; bonding and adhesives; and flooring, paving and construction.

WEAKNESS

BPA growth has been historically strong. From 1990 to 2000, the consumption of BPA almost doubled, increasing at an average annual rate of about 7 percent. Most of this growth was primarily due to greater demand in the polycarbonate and epoxy resins sectors, with the secondary markets of flame retardants and polysulfones contributing as well. Between the years 2000 and 2003, consumption decreased because of weak economic conditions. But even with the present economic recovery, BPA will not return to stellar performance as its applications are starting to mature and the traditional export markets for PC and epoxy resins have been constructing their own resin production facilities.

OUTLOOK

In early 2004 the BPA market became extremely tight due to limited supply of phenol feedstock, maintenance turnarounds and production glitches, as well as a surge in demand all major derivatives, particularly PC and epoxies. The market for PC and epoxy resins has greatly improved this year, in conjunction with the recovery of the US economy. However, a protracted run-up in feedstock and energy costs has strained margins, and producers are looking for price increases. Benzene costs, which have tripled this year, are a particular concern as benzene is a primary raw material in the cumene to phenol to BPA chain. Overall, BPA is projected to grow at 4 percent annually, at least through 2007.


By: Mark Kirschner
+1 713 525 2653



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