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Polycarbonate growth expected to slow down on declining demand from optical media segment

Polycarbonate growth expected to slow down on declining demand from optical media segment

Polycarbonate is a very clear polymer with exceptionally high levels of impact strength and ductility, as well as inherent fire resistance and good resistance to UV light. PC resins find major application in the electrical/electronic sectors such as computer and business equipment and optical discs, glazing and sheet products and in the automotive industry. Other uses include safety helmets and shields, housing components, household appliances, water bottles, lighting fixtures, sporting goods and aircraft and missile components, as per ICIS. Global PC consumption in 2008 was 3.25 mln tons. It is expected to grow at 7% for the next 5 years to reach about 4.6 mln tons by 2013. Bayer predicts that global polycarbonate demand for automotive glazing could reach between 100,000 to 200,000 tons by 2014. Global polycarbonate demand has been growing at 7-8% pa. CMAI estimates that total global polycarbonate demand in 2008 was around 3.27 mln tons.
The optical media segment which includes CDs and DVDs recorded the strongest growth with rates around 35% pa from 1996-2000, slowing to 10% pa in the 2001-2005 period. However, its future growth rate will slow significantly and then start to decline as CDs and recordable CDs are replaced by MP3/MP4 players, high internet bandwidth and USB drives. Recording industry trade group IFPI predicts that almost 25% of global music sales will be downloaded from the internet by 2010. Sony�s Blu-Ray high definition DVD is expected to boost PC demand although downloading via the internet, cable and satellite may impact these discs. Media consultants are now expecting a short-lived growth spurt for high definition DVDs before video on demand via the internet and cable and satellite television services overtake the Blu-Ray technology. However, this may allow a more orderly decline in the overall optical media market.
Growth is still expected in other sectors such as alloys used in automotive and electronic products, cell phones, televisions, business equipment and sheet and construction products. Automotive glazing offers potentially strong growth opportunities for polycarbonate. While polycarbonate is being used in headlamp and tailgate lenses, roof modules and fixed side windows in cars and trucks, there has been strong resistance from the automobile manufacturers in the more general replacement of glass. Polycarbonate has replaced glass on windscreens for motorcycles due to its light weight and safety factors. Some of the limiting factors are the poor scratch resistance of polycarbonate and the higher cost compared to glass. Polycarbonate does offer weight savings, broader design options and easier handling that could bring efficiencies on the automotive production line. Applications are expected to widen into back lights and rear windows in truck cabins, moveable side windows and vehicle top applications.
Demand has been hit by the economic crisis particularly impacting the construction and automotive sectors. CMAI expects global demand will start to recover again in 2011. Meanwhile, Bayer is predicting slower growth at around 5% pa between 2009 and 2015 as the key optical media market slows. The downturn in demand has resulted in a number of projects being delayed or postponed indefinitely. However, CMAI still expects capacity growth to outstrip demand growth. Majority of the new capacity is planned in Asia with a 260,000 tpa plant due on-stream in Saudi Arabia in late 2011. CMAI predicts global operating rates to fall to the low 70% by 2012. Asia Pacific already is the largest polycarbonate market worldwide, representing more than half of the global market. Bayer estimates that China alone will account for 40% of the global market in the next two-to-three years. Estimates from PC producers put growth rates in China up to 10% pa. The US market had been growing at 5% pa but a prolonged weakness in the US housing and automotive markets will impact demand. While growth is slowing in the optical media sector, long-term growth is still expected in other sectors such as alloys used in automotive and electronic products. With higher fuel economy goals mandated in the US, automotive glazing offers potentially strong growth for PC. Several US retailers have removed polycarbonate food and beverage containers from their shelves due to concern that small amounts of bisphenol-A (BPA) can be released from the polycarbonate bottle. The US government�s National Toxicology Program has said there is limited evidence that low doses of BPA can cause health problems and reproductive defects in humans. However, the impact on polycarbonate demand is expected to be small as total packaging applications only account for 3% of overall demand.
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