Chemical profile: Bisphenol A

Bisphenol A

14 January 2008 00:00  [Source: ICB]

DEMAND

2005: 2.174bn lbs (986,000 tonnes) 2006: 2.345bn lbs 2010: 2.76bn lbs, projected. Demand equals production plus imports (2005: 31.5m lbs 2006: 10.6m lbs) less exports (2005: 108m lbs 2006: 76m lbs).

GROWTH

Historical (2001-2006): 4.5%/year future: 4.2%/year through 2010.

PRICE

Historical (2001-2006): High, 74 cents/lb, free alongside ship export value low, 39 cents/lb same basis. Current: 85-90 cents/lb, same basis.

USES

Polycarbonate (PC) resins, 75% epoxy resins, 20% miscellaneous, including flame retardants (mainly tetrabromobisphenol A), unsaturated polyester, polysulfone, polyetherimide and polyarylate resins, 5%.

MARKET PERSPECTIVE

The largest market for bisphenol A (BPA) is PC resins, which account for approximately 75% of US demand. PC consumed in automotive applications accounted for about 20% of the total demand. 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% of PC consumption. Optical media (CDs and DVDs) also account for 20% of the PC resin market. PC consumption in the optical media sector has been slowing, however, as competing technologies (MP3 players, high internet bandwidth and USB drives) grow more popular.

The second-largest end use for BPA is epoxy resins, which provide 20% of demand. Several types of epoxy resins are produced in the US. Those based on BPA and epichlorohydrin account for approximately 90-95% of US production. These resins are high-performance thermosetting resins. During 2003-2006, epoxy resins consumption in the US grew by 3.5%/year. High-performance coatings continue to be the primary application, followed by electrical/electronic laminates, adhesives, flooring and paving applications - chiefly in the automotive, construction and aerospace industries.

Last November, the US National Institute of Health (NIH) released its final report on BPA. The NIH has "minimal concern" that BPA exposure could cause reproductive or prostate problems, or accelerate puberty and "negligible concern" that BPA could cause birth defects and malformations. But the NIH did say there may be "some concern" regarding possible adverse effects on human neural and behavioral functions. The industry response to this final statement was that the finding was based on a small number of small-scale studies that suggest that BPA may cause certain effects.

OUTLOOK

As of mid-2007, BPA supply was relatively tight because of a shortage of its raw material, phenol, and increased demand from PC and epoxy resins. Consequently, significant price increases were seen, which squeezed margins of PC and epoxy resin manufacturers. This situation is likely to continue into 2008 with the cost of crude oil at an all-time high and BPA producers operating their plants at near capacity. The major application segments - PC and epoxy resins - are anticipated to grow by 4.5% and 3.5% respectively, resulting in an aggregate demand growth of 4.2% for BPA


US BISPHENOL A CAPACITY, MILLIONS OF LBS/YEAR

Company Location Capacity
Bayer Polymers Baytown, Texas 420
Dow Chemical Freeport, Texas 420
SABIC Innovative Plastics Burkeville, Alabama 165
SABIC Innovative Plastics Mount Vernon,Indiana 585
Hexion Specialty Chemicals Deer Park, Texas 550
Sunoco Chemicals Haverhill, Ohio 240
TOTAL 2,380
SOURCE: ICIS CHEMICAL BUSINESS

*Millions of lbs/year of bisphenol A (4,4-isopropylidene diphenol, or BPA). All US producers make BPA through an acid-catalyzed (hydrochloric acid) condensation reaction of phenol with acetone, and usually a promoter like methyl mercaptan is present. All companies have captive phenol and acetone supplies for BPA production and all except Sunoco have captive BPA requirements for downstream resins.

SABIC Innovative Plastics captively uses all of the bisphenol A produced at its two plants, in the manufacture of polycarbonate (PC) resins and polyetherimides.

Hexion Specialty Chemicals is owned and operated by private equity firm Apollo Management. Apollo formed the company by the roll-up of Borden Chemical, Resolution Performance Products and Resolution Specialty Materials. The BPA plant in Deer Park, Texas, came into the fold with Resolution Performance Products.


Profile last published December 6, 2004

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