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Urbanization, rising incomes in Asia Pacific leads growth in global flame retardant market

Urbanization, rising incomes in Asia Pacific leads growth in global flame retardant market

26-Aug-15

Flame retardants are the compounds which when added to materials such as plastics products, electrical devices, construction materials or textiles delays the production of flames to prevent the spread of fire. There are various types of flame retardant such as aluminum trihydrate, antimony oxides, brominated flame retardant, chlorinated flame retardant, organophosphorus flame retardants, and other flame retardant chemicals. Usage of flame retardant market is increasing in the electronic industry due to its property of decreasing the flammability of combustible substances. Some of the major end user applications of flame retardant market include building & construction, electronics, automotive & transportation, wires & cables, textiles & other applications.
As per Persistence Market Research, some of the major factors driving the flame retardant market are high demand from current and emerging applications, demand from emerging economies, advancement in technology, increased security measures and the new regulatory guidelines for reducing toxic chemicals. Governments across the globe are setting improved safety standards for smoke and flammability range in different products. The growth in automotive, construction and other major end use industries are increasing the demand of flame retardant market globally. Nanotechnology is expected to play a major role in improving performance of a flame retardant market in the years to come. The major growth opportunities for the flame retardant market includes equipment & electronics, automotive & construction, in the emerging economies especially the one which are expanding in the infrastructure applications. The growth in these segments in emerging economies is likely to increase the market demand for flame retardant and the products based on it. A major factor restraining the market growth is rise in the prices which may lead to further decrease in demand. The key producers are raising the prices of flame retardant market due to the rise in feedstock costs. In addition, there is a toxicity issue at the time of flame retardant production process which could hamper the market further. Asia Pacific is the largest sales market for flame retardant. China alone accounts for about 24% of the global demand of flame retardant. High demand in China is driven by growth in the chemicals and automobile industry in the country. India is also expected to increase its share in the global market on the basis of increasing foreign investment which will result in increasing number of new industries in the country. Asia Pacific is expected to continue in its leadership position in the forecasted period due to the growing end-user markets in countries such as China and India. North America continues to be the second largest sales market followed by Western Europe. Currently, the Middle East and South American countries have a very low market share; however it is expected to increase in the coming years. Some of the major companies operating in the global flame retardant market include Akzo Nobel NV, Albemarle Corporation, Almartis GmbH, BASF SE, Borealis GmbH, Budenheim Iberica SLSC, Campine NV, Chemtura Corporation, China Antimony Chemicals, Clariant International Limited, Cytec Industries Incorporated, Daihachi Chemical Industry Company, Dover Chemical, and Glencore International AG. Among which, Albemarle Corporation, Chemtura Corporation, and Clariant International Limited are the most active companies in the flame retardant chemicals market.

Global demand for flame retardants is projected to expand 4.6% pa through 2018 to 2.8 mln metric tons, valued at US$7 bln, as per Reportbuyer. Advances will be stimulated by an acceleration in manufacturing output, especially in the US, Japan and Western Europe, as they recover from the recession-impacted 2008-2013 period. In industrializing countries, continued robust economic growth and increasing market penetration for flame retardants, as building codes are more strictly enforced, will fuel sales increases. Rising personal incomes will also contribute to sales of flame retarded plastic products, such as automobiles containing advanced plastics, as well as foamed plastic insulation and vinyl flooring in homes. The Asia Pacific region will post the fastest growth in demand of any area around the world and retain its position as the largest regional market, accounting for more than half of 2018 global flame retardant consumption. China and India will be the most rapidly expanding national markets worldwide, followed by Thailand. Rising urbanization, along with climbing personal incomes in these nations, will stimulate a heightened awareness of fire safety and more strictly enforced building codes. Central and South America and the Africa-Mideast region will also record above average sales increases for flame retardants. North American demand will rise at a faster pace than other developed areas due to a forecast rebound in the US construction market, but will remain below the global average. Flame retardant markets in Western Europe and Japan, while rebounding from 2008-2013 declines, will nevertheless trail the pace of world growth considerably. Alumina trihydrate (ATH) was the most widely used flame retardant in the world in 2013, accounting for nearly one-third of global consumption, and it is expected to retain its dominance in the product mix through 2018. Phosphorus-based flame retardants, on the other hand, will record the fastest market gains of any major product type. Other flame retardants, such as magnesium hydroxide (MDH) and melamine, will also record above average gains. Halogenated retardants, represented by bromine- and chlorine-based products, are being phased out across the globe due to their perceived environmental and human health risks, creating an opportunity for suppliers of alternative flame retardants to replace them. Nevertheless, the introduction of less hazardous formulations by halogenated retardant suppliers will support gains to a degree. Sales of flame retardants used in construction applications will record the strongest growth of any major market through 2018. It will also account for the largest share of the market in that year with 28% of the total worldwide. A sizable rebound in US construction spending and rising flame retardant utilization rates in developing countries will spur demand. As populations become ever more concentrated in urban centers, it will be of greater importance to strictly enforce building codes to reduce incidences of fire, bolstering flame retardant sales in such products as foamed plastic insulation and vinyl flooring. This will stimulate demand in related markets as well, such as furniture, home electronics, and wire and cable.

Worldwide, the demand for flame retardant additives will rise by 6.1% annually, from 1.7 mln tons in 2009 to 2.2 mln tons in 2014, according to a study by the Freedonia Group. The Asia Pacific region will enjoy the fastest growth rates until 2014 with the mature markets of North America, Western Europe and Japan experiencing growth at a more modest pace. Worldwide demand for flame retardant additives is forecast to rise 5.4% pa to 2.6 mln metric tons in 2016. Advances will represent an acceleration over the 2006-2011 period, in which demand was severely impacted by the effects of a global economic slowdown, especially in the mature markets of the US, Western Europe, and Japan. In addition to an improved economic outlook, flame retardant demand through 2016 will benefit from trends toward improved fire safety and flammability standards - particularly in the developing world - and the rising use of plastic products over less flammable materials. Alumina trihydrate was the leading flame retardant product by volume in 2011, and is expected to post above-average gains in demand through 2016, driven by trends toward non-halogenated chemicals. Halogenated types (chlorinated and brominated) will see subpar advances due to health and safety concerns, while in turn providing opportunities for a number of non-halogenated alternatives. Flame retardants that feature more favorable environmental profiles, including boron, phosphorus, melamine, and magnesium hydroxide, will benefit most from the trend away from the use of halogenated chemicals. However, although brominated flame retardants are being phased out of a number of applications, superior performance and new environmentally friendly formulations will help these products remain an important part of the product mix going forward. Construction and electrical and electronic applications were the leading markets for flame retardants in 2011, each accounting for about one-fourth of overall demand. Faster gains are expected for construction products, fueled by the recovery of the markets in North America and Western Europe and increasing flammability standards in the developing world. Wire and cable, for both communications and power transmission, will expand along with new construction, generating demand for flame retardant products. Demand in motor vehicle applications will also exhibit improvement due to the rebound in motor vehicle output in North America, Western Europe, and Japan and continued growth in developing countries. The increasing use of plastics in vehicles provides additional opportunities for flame retardant demand. The Asia Pacific region will continue to be the largest and fastest-growing market for flame retardants through 2016, accounting for more than half of global demand. Advances will be fueled by over 8% annual growth in the large Chinese market, rapid development in less developed countries such as India and Thailand, and solid growth for electronics producers such as South Korea and Taiwan. Gains in North America will reflect Mexico’s growing importance as a producer of electronics and other consumer goods for the American markets, and the recovery of building construction in the US. Western Europe will see a rebound from the declining demand of the 2006-2011 period, although financial uncertainty will restrain growth in flame retardant outlets such as construction and motor vehicle production. An update by Freedonia pegs world demand for flame retardants to reach 2.8 mln tons by 2018.

In 2013, more than 2 mln tons of flame retardants were consumed worldwide as per Ceresana, with forecast of revenues of approx. US$7.15 bln to be generated in 2021. Flame retardants prevent or delay the combustion of materials and are indispensable in the protection of plastic products, electric devices, construction materials or textiles. An increasing demand for plastics in the construction sector, automotive industry and the segment electrics and electronics results in a continuing growth of the market for flame retardants. Asia-Pacific is the largest sales market for flame retardants, China single-handedly accounts for almost 24% of global demand. Even though the American market suffered losses in the previous years, in the construction industry in particular, North America continues to be the second largest sales market, followed by Western Europe. Driven by China and India, Asia-Pacific will gain market shares in the future. The Middle East and South America will be large growth markets as well; absolute figures in these regions are, however, considerably lower. The most important application area for flame retardants is the construction sector. An increasing amount of flammable materials are used in thermal insulation and improvement of energy efficiency of residential buildings. Pipes and cables made of plastics are used both in the construction of new buildings and the refurbishment of old ones, and are increasingly replacing conventional products such as pipes made of metal in emerging countries as well - fire protection has to be improved accordingly. The transportation industry (vehicles and aerospace) has also been notably increasing demand for high-performance, flame retardant plastics in the past years. In the future, the sector electrics and electronics will be the largest growth market. Manufacturers in the subsegment smartphones and tablet computers in particular will not only raise demand for flame retardant materials, but also put a rising value on the environmental impact of the flame retardants consumed. While environmental organizations are campaigning for a continued reduction of the use of brominated flame retardants, some countries still introduce bromine-based products on the market. Nevertheless, the market for halogenated flame retardants (brominated andchlorinated flame retardants) is rapidly losing market shares to environmentally friendly products. Due to product innovation, consumption of phosphoric flame retardants is increasing at much higher rates than was expected a couple of years ago. The highest increase at an AAGR of 5% in the future is expected for products based on organophosphates, followed by products based on antimony oxide. In a global context, ATH (aluminum hydroxide) is the most commonly used type of flame retardant. Even though the market share held by brominated and chlorinated flame retardants is declining, absolute consumption continues to rise. In a regional context, the situation is more differentiated. Despite phosphorous-based products becoming very prominent in China as well, halogenated flame retardants are dominating this particular market so far. In both Western Europe and North America, ATH compounds account for about half of total market volume.

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