11 October 2011 16:34 [Source: ICIS news]
By Janos Gal
LONDON (ICIS)--Innovation has always been at the core of the petrochemical industry. Without it, the sector would not have developed into what it is today.
A side-effect of this constant innovation is that new, more modern product applications render others obsolete or less desirable.
The polycarbonate (PC) business is no different. Some customer segments are thriving, whilst others, such as the optical media industry, are steadily shrinking.
In the western world, trends have shifted from storing data on plastic discs to storage on USB drives, portable hard-drives and memory cards. Over the years the size of these portable devices shrank and their storage capacities grew. At the same time, disc sizes largely remained the same, so they could not compete.
The industry’s future growth rate will decline as CDs, DVDs, Blu-ray discs and recordable CDs are replaced by MP3 and MP4 players, high internet bandwidth and USB drives.
“Because a lot of people have started to download music and videos from the internet instead of buying CDs and DVDs, disc sales have shrunk significantly in the western world,” said one European polycarbonate producer.
According to ICIS data, global polycarbonate nameplate capacity is an estimated 4.78m tonnes/year. Within the polycarbonate industry, the optical media segment recorded the strongest growth between 1996 and 2000 at a rate of around 35% a year, but this slowed to 10% a year from 2001 to 2005.
“At one point the industry thought the new Blu-ray technology would drive demand up again, but it is not very popular because it is expensive and to play it you need a new player,” said a second European producer.
Sales generally pick up before Christmas, which is the peak season for optical media purchases but after it, demand traditionally slows.
According to GBI Research, 20% of global polycarbonate demand comes from the optical media sector. Industry experts forecast it will decline by around 5-7% a year in the western hemisphere until 2016, when only around 10-15% of global polycarbonate demand will come from the sector.
Since the rise of the internet, the polycarbonate industry has feared that the optical media sector will one day disappear because of downloads, but in the meantime demand is growing in the developing world, where fast internet connections are unavailable and other technologies are too expensive.
“Sales in third-world countries are increasing, especially in Asia, where a large number of discs are sold on the black market,” said a major European producer.
While demand from the optical media sector is declining, global polycarbonate demand is growing by 5-6% a year, driven by the electrical and electronic, automotive, medical and construction sectors.
Innovative technologies mean that an increasing number of construction projects use large amounts of polycarbnate. For example, stadiums such as the Euro 2012 football championship stadium in Slaski Chorzow, Poland, and the Aviva Stadium in Dublin, Ireland, have used polycarbonate for the roof and walls.
In addition, a large number of medical appliances are made from polycarbonate, such as valves, pumps, sterilisation baths and staplers.
One of the most promising future applications that many expect to one day dominate the polycarbonate market is glazing for automobiles. Producers say that using polycarbonate instead of glass in cars will give car manufacturers the flexibility to use many different shapes. It would also help reduce carbon emissions because the plastic glazing weighs less than glass, thereby reducing fuel consumption.
Plastics can be used in side windows and panoramic roofs, as well as lighting and other multifunctional parts, but for the time being glass is cheaper and the technology is not in place to produce plastic glazing on an industrial scale.
In addition, opponents say that polycarbonate cannot replace glass because it is not scratch resistant and wipers can easily damage windows.
Again, innovation can help.
“Scratch resistance can be improved by applying a special coating, but I expect it will take at least five more years for it to become mainstream and cheaper to produce,” said a producer.
As these new technologies develop, they replace others, which again will be replaced. The beauty of this never-ending cycle is that this ensures the sector's existence.
For more on polycarbonate visit ICIS chemical intelligence
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