US chemical profile: Polycarbonate

21 June 2010 00:00  [Source: ICB]

USES
Polycarbonate (PC) resins have major markets in the electrical/electronic sectors, in glazing and sheet products, and in the automotive industry. Other uses for PC resins include safety helmets, shields, housing components, household appliances, water cooler bottles, lighting fixtures, sporting goods and aircraft and missile components.

SUPPLY/DEMAND
Demand for PC resin was hit when its major markets - construction and automotive - were negatively impacted by the economic crisis. US-based consultant CMAI expects that global demand for PC resins will start to recover again in 2011.

The US PC market had been growing at a 5%/year rate before declining as a result of the prolonged weakness in the US housing and automotive markets. However, while growth is slowing in the optical media sector, long-term growth is still expected in other sectors such as alloys, which are used in automotive and electronic products. Also, the higher fuel economy goals mandated in the US offer a potentially strong growth outlet for PC via automotive glazing applications.

US producers have been relying strongly on export markets for PC resins. The US International Trade Commission estimates exports at 406,000 tonnes in 2008, equivalent to 42% of domestic capacity.

Meanwhile, exports in early 2009 were down by half. In the longer term, US exports could be impacted by new capacity in Asia and the Middle East.

PRICE
US spot prices fell to the low end of the range in the week ended June 9, based on a deal reported that week. One compounder in the Midwest reported buying PC at $1.45/lb ($3,197/tonne, €2,622/tonne). Other market participants said most material was still available in the low $1.50s/lb, according to global market intelligence service ICIS pricing.

US-based SABIC Innovative Plastics (IP) (formerly GE Plastics) announced it would seek a 16 cent/lb ($353/tonne, €296/tonne) increase in the Americas for all grades of PC, effective July 6 or as contracts allow. The company said it was pushing for similar price hikes in all global regions.

US major Dow Chemical also pushed for a 7 cent/lb increase for PC, effective June 24 across all regions. Buyers said they were skeptical that the companies would realize most, if any, of the price increases amid falling feedstock prices, such as benzene dropping by 80 cents/gal since January to $2.90/gal on the spot market the week ended June 9.

TECHNOLOGY
PC took off commercially in the late 1950s when Germany's Bayer and US-based GE separately commercialized processes to make it from bisphenol A (BPA). These early productions were based on the reaction of phosgene with phenol to make diphenyl carbonate (DPC), which was then reacted with BPA. This route suffered from slow reaction rates, however, and the need for several small-scale batch reactors.

Tougher environmental restrictions have put pressure on the development of nonphosgene routes, some of which have been independently developed by SABIC IP, Bayer, Japan's Mitsubishi Gas Chemical together with Mitsubishi Chemical, and Asahi, also Japanese, together with Chi Mei of Taiwan. Teijin of Japan and Korea's LG are also independently developing phosgene-free routes.

OUTLOOK
Automotive glazing offers potentially strong growth opportunities for PC resins. Bayer predicts that global PC demand in this application could reach between 100,000 tonnes and 200,000 tonnes by 2014. Applications are expected to widen into back lights and rear windows in truck cabins, moveable side windows and vehicle top applications.

PC has currently replaced glass on windscreens for motorcycles due to its light weight and safety factors. However, automobile manufacturers are resisting the use of PC to replace glass in other vehicles, despite the compound being already used in headlamp and tailgate lenses, roof modules and fixed side windows in cars and trucks.

Poor scratch resistance is one of the problems making automobile manufacturers reluctant to use it instead of glass. However, Bayer has said that multilayer PC products have been developed to overcome this problem. PC is more expensive than glass, but does offer weight savings, broader design options and easier handling.

US Polycarbonate CAPACITY, '000 Tonnes/year
Company Location Capacity
Bayer Baytown, Texas 260
SABIC Innovative Plastics Burkville, Alabama 265
Mount Vernon, Indiana 245
Dow Chemical Freeport, Texas 105
TOTAL 875
SOURCE: ICIS PLANTS & PROJECTS

Profile last published February 28, 2005

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By: Feliza Mirasol
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