Engineered plastics' global demand back on the rise

The global market for engineered plastics will exceed 20 million tonnes by 2015, fueled by restored health in most end-use markets, and in particular, the automotive sector. Global Industry Analysts' (GIA) new report on the engineered plastics market notes that Europe and Asia-Pacific will account for a majority share of the global market for the materials, with a continued shifting of global production bases to lower-cost Asian countries.

China and India, in particular, are forecast to "emerge" as the global growth driver over the medium- to long-term period. This shift will be fed in part by the already expanding automobile demand in these countries.

Polycarbonate (PC) growth will be stimulated by expanding applications in motor vehicles, construction, and medical products, in addition to increased use of PC in alloy combinations with other plastics. GIA believes that the automotive industry will witness what it calls "a distinct re-focus on functional and performance materials like engineering plastics" due to their ability to help reduced automakers' carbon footprint.

This will promote lightweight composite nylon resins towards greater adoption in automotive under-the-hood applications, as manufacturers shift towards engineered plastics such as nylon 6 or nylon 66 in attempts to decrease weight, lower costs, and obtain design flexibility in architecture. Demand for engineered plastics in automotive applications in Asia-Pacific is expected to surge at a compound annual growth rate of 5.0% during the analysis period.

GIA forecast reinforced plastics to reach a total market of 7.3 million tons by 2015 in a separate report. Here again, GIA posits that the market will be driven by the focus on developing lightweight, fuel-efficient vehicles and reducing product lifecycle costs while increasing inclination towards alternative energy sources.

Europe, Asia-Pacific, and the U.S. account for a major share of the global reinforced plastics market, with motor vehicles and construction representing most of the aggregate demand for reinforced plastics. The transport sector is expected to see "reasonable" growth, according to GIA, thanks to the resurgence in motor vehicles production.

Global nylon 6 engineering resin demand is forecast to grow at an average annual rate of close to 5%, with announced capacity additions falling short of forecast growth in global demand. Chemical Market Associates Inc. (CMAI) says that supply/demand dynamic will cause plant operating rates to rise only modestly over the next five years.

CMAI includes those findings and others in its recently completed 2011 World Nylon Engineering Resins Analysis. The annual study covers historical trends and future projections for the global supply, demand, production, capacity, trade, pricing, and profitability of nylon 6 and nylon 6,6 resin from 2005 to 2015.

CMAI notes that the growth of global nylon 6 demand has been shaped in recent years by the movement of finished goods production to China from North America and other regions. So much has shifted that Northeast Asia has become the largest nylon 6 consuming region in the world.

Global nylon 6,6 supply was constrained in 2010 by raw material supply concerns related to butadiene availability and production issues for key intermediates. Several force majeure declarations in Europe and North America impacted the global availability of nylon intermediates and tightened the supply of nylon 6,6. The demand for nylon 6,6 resin in 2010 has been mostly flat, and the gap between demand and capacity is not as large as for nylon 6.

Global nylon 6,6 engineering resin demand is forecast to grow at an average rate of close to 6%. CMAI believes additional capacity will be needed but will depend on the availability of intermediate materials. Adipic acid is readily available, but adiponitrile (ADN) and hexamethylene diamine (HMDA) technology and supply are more challenging, according to CMAI.