US Chemical profile: Bisphenol A

24 June 2011 19:49  [Source: ICB]

US, FELIZA MIRASOL profile last published JANUARY 14, 2008

Correction: The ICIS Chemical Business story headlined “US chemical profile: Bisphenol A”, was originally published online with an incorrect price chart that plotted a sharp price drop, which did not occur. The incorrect chart also appears in the print version of the 27 June issue of ICIS Chemical Business on page 43. Please disregard the chart in the magazine. A corrected story follows.

Bisphenol A (BPA) is mainly used in the production of polycarbonate (PC). Its second-biggest use is in epoxy resins. Other applications include flame retardants (mainly tetrabromobisphenol-A), unsaturated polyester resins and polyacrylate, polyetherimide and polysulphone resins.

Global BPA market growth is expected to be stable at 5%/year. The Asian markets are predicted to grow at 11%/year, with China growing by over 13%/year. In contrast, the US market is expected to be flat in the 2010-2012 period, with an expected growth rate of 1-2% in 2012-2015, according to estimates by German trader Mitsui & Co. Deutschland.

BPA growth over the last few years has been driven primarily by increasing demand for PC resins used in the manufacture of optical media, but growth in this sector has slowed significantly. Growth is also expected to decline as the use of optical media declines and gives way to the downloading of music and films directly from the internet, as well as competing with other increasingly popular technologies.

In comparison, automotive glazing offers potentially strong growth opportunities for BPA/PC producers. PC resins are used in place of traditional materials such as metal and glass in automotive components. Glazing and sheet products can also be used in architectural, security and transportation applications.

On March 28, Bayer MaterialScience lifted the force majeure on its North American PC and BPA production. The Germany-headquartered producer had declared force majeure on February 2, when production issues caused by freezing weather arose at its 260,000 tonne/year facility in Baytown, Texas.

US BPA prices are expected to fall on improved supply because phenol-to-BPA producers have been running at high rates after being low on feedstocks during the first quarter. Asia prices have already tumbled.

The lifting of Bayer's force majeure is expected to weaken momentum for several price increase announcements in the US PC market, where the company sought a price increase of 25 cents/lb ($551/tonne, €391/tonne) effective March 31, or as contracts allow. In addition, US-based Styron sought a PC price increase of 22 cents/lb, effective April 1, or as contracts allow, while US-headquartered SABIC Innovative Plastics sought a price increase of 22 cents/lb, effective April 4, or as contracts allow.

On the downstream epoxy resin side, there were several price increase nominations set for June 1 that pushed US epoxy resin prices to or above the $1.90/lb ($4,189/tonne, €2,890/tonne) delivered (DEL) North America level, as assessed by ICIS.

US epoxy resins buyers and importers used weaker feedstock prices initially to resist June price increases of 10 cents/lb. But US epoxy resin producers were said to be confident that buyer resistance would weaken as inventories get used up.

BPA is produced by the condensation of phenol and acetone in the presence of an acid catalyst (hydrogen chloride) and usually a promoter such as methyl mercaptan. Cation exchange resins can replace the acid catalyst in newer plants.

After the reaction and recovery of acid and phenol, the BPA is washed with water, neutralized with calcium hydroxide and distilled under vacuum. Newer processes employ ­distillation and extractive crystallization under pressure to purify the BPA.

Long-term growth for the epoxy resin markets is expected to be 5%/year globally. However, concerns over health issues with BPA have attracted the attention of environmentalists.

In response, US industry trade group The American Chemistry Council (ACC) has claimed that fears about BPA are overblown, citing research that the levels ingested by most people are far too low to have adverse effects.

Despite this, however, some North American retailers have removed baby bottles and water bottles containing PC from the shelves, while Canada has announced plans to ban PC baby bottles. Yet the impact on BPA/PC demand is expected to be small, as packaging applications in total only account for around 3% of overall PC demand.

By: Feliza Mirasol
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