Chemical Profile POLYCARBONATE

21 January 2002 00:00  [Source: ICB Americas]

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POLYCARBONATE   January 21, 2002

US PRODUCER

CAPACITY*

Bayer, Baytown, Tex.

400

Dow, Freeport, Tex.

230

GE Plastics, Burkville, Ala.

430

GE Plastics, Mount Vernon, Ind.

540

Total

1,600



*Millions of pounds per year of polycarbonate (PC) resins. Unblended resin accounts for more than 80 percent of PC demand. The balance consists of blends or alloys with other resins. In August 2000, GE Plastics reported that it will increase PC resin capacity at its Burkville, Ala., site by 165 million pounds annually. The project is scheduled for completion in the first quarter of 2002. In first quarter 2001, Bayer announced plans to expand PC production at its Baytown, Tex., production facility to 770 million pounds annually. This expansion is part of a global investment strategy, which Bayer expects will make it the world market leader in this segment by the year 2005. More detailed project timing was not disclosed. Profile last published 1/11/99; this revision 1/21/02.

DEMAND
1999: 1.052 billion pounds; 2000: 1.037 billion pounds; 2004: 1.158 billion pounds.
Demand equals production plus imports, which were 95 million pounds in 1999 and 135 million pounds in 2000, less exports, which were 612 million pounds in 1999 and 751 million pounds in 2000.

GROWTH
Historical (1995-2000): 4.8 percent per year; Future: 2.8 percent per year through 2004.
Since 1995 to 2000, US demand for PC resin has increased by 4.8 percent annually. In this same period, PC exports increased from 295 million pounds to 751 million pounds--an annual increase of 20 percent. To accommodate this huge increase in export demand, production grew at slightly more than 10 percent annually, a growth rate that mirrored global consumption growth.

PRICE
Historical (1995-2000): High, $2.46 per pound, list, resin, pellets, nat., t.l., frt. alld.; low, $2.46, same basis. Current: $2.46, same basis.
Current market pricing is $1.60, same basis.

USES
Glazing and sheet, 22 percent; optical media, 17 percent; automotive, 16 percent; medical, 9 percent; computers and business machines, 8 percent; appliances, 7 percent; recreation and safety, 7 percent; packaging 4 percent; miscellaneous, including electrical, lighting and film uses, 10 percent.

STRENGTH
Polycarbonate's durability, optical clarity, and ability to be blended with other polymers are attributes that contribute to PC's strong performance in recent years. Optical media formats, such as CDs and DVDs, and molding of electronic device casings have stimulated PC demand. The global PC market for optical media has grown from roughly 240 million pounds in 1995 to a total of 850 million pounds in 2000. Although demand for audio CDs and CD-ROMs has peaked and will decline slightly, the market for recordable and rewritable CDs and DVDs is projected to increase dramatically and stimulate growth in PC. Based on an estimated yearly growth rate of 20 percent per year, the world consumption of PC is expected to double within five years to reach 1.7 billion pounds in 2005. Automobile sidelights or windows may be the next boom application for PC. Automakers are interested in lightweighting their vehicles for improved fuel economy, and PC is about 40 percent the weight of glass. PC does not shatter as readily as does tempered glass, so passenger containment in the event of rollover accidents is also improved. However, issues of weatherability and abrasion resistance stand in the way of widespread use. To foster acceptance of PC sidelights, Exatec, a joint venture between Bayer and GE Plastics, is developing polycarbonate windows for cars, with glass-like coatings for improved abrasion resistance.

WEAKNESS
Interpolymer competition in the automotive, electronics and construction industries is intense, and these markets account for a sizable chunk of PC's overall demand. Polymethyl methacrylate (PMMA) in particular, has been targeted for use in DVD applications by its producers. Low birefringence, high light transmission, lower viscosity, and lower cost are touted advantages of PMMA. Also, increasing overseas PC capacity, particularly in Asia, could displace US polycarbonate exports, which have been growing at 20 percent annually in recent years. Bisphenol-A, a raw material in PC production, is considered an environmental estrogen that may cause human reproductive disorders. A plastics industry consortium and the Food & Drug Administration are studying whether bisphenol-A poses a risk when used in food packaging. To date, nothing definitive has been released on this issue, so it remains an unknown and potential problem for PC.

OUTLOOK
US polycarbonate resin demand is expected to show growth in all application areas. With the current downturn in the economy, however, growth will be mitigated to only 2.8 percent through 2004. Although optical media applications will do exceedingly well, most of this activity will take place in Asia. If the automotive sidelight market is successfully penetrated, then the projected growth for PC will perhaps double. New capacity additions due on stream next year and beyond should insure adequate supply, even in the face of a robust global demand growth in the 8 to 10 percent range.





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