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End user safety and legislations push global demand for flame retardants

End user safety and legislations push global demand for flame retardants

01-Jun-17

The emergence of strict regulations and protocols that keep tabs on the safety in end-user industries has given a real push to the global market for flame retardants. The global flame retardants market is expected to reach a value of US$10,212 mln by the year 2022, according to a report by Allied Market Research. This will be achieved with a CAGR of 6.6% during the period 2014–2022. The market sees major potential in the upcoming applications for specific types of plastics. It is also expected to be influenced by the changing standards of flame retardancy and fire safety across industry verticals. The rapid industrialization of the world has also simultaneously increased the need for stringent security measures in place across various end-user industries. The various types of flame retardants have become an essential safety protocol especially in industries including th3e construction, electronic, and automotive industry. Certain areas, equipment and tools that are susceptible to ignition and fire hazards are treated with flame retardants in order to minimize risk and loss of material caused by a potential fire. This has augmented the emergence of the flame retardants market in the last few decades. Some of the largest end-users of flame retardants belong to the automotive and transportation vertical. An integral part of automotive textiles, insulation panels, and covers & casings of vehicle interiors, the use of flame retardants has witnessed a growth spurt in demand over the last few years. Moreover, the emerging application of flame retardant optical fiber has also propelled the industry ahead on the path of progress.
The brominated flame retardant - hexabromocyclododecane (HBCDD), is a vital part of several automotive components. The automotive industry accounts for the largest consumption of brominated HBCDD, in terms of volume demanded. Flame retardants are also used in the seats to ensure the safety of passengers from potential fire ignited during accidents or smoking. However, the widespread use of the chemical has also increased the toxicity in the atmosphere. The inhalation of HBCDD by the human body is known to cause respiratory issues and gastrointestinal infection. The environmental concerns relate to the effects of HBCDD pollution in aquatic life. These concerns have triggered the implantation of stringent regulations by regulatory bodies and reigning governments for sustainable use. For instance, the EU Resolution on persistent organic pollutants (POP) has recently been amended. The change includes the addition of concentration limits for brominated flame retardant HBCDD in wastes. The parties to the Stockholm Convention have decided the prescribed concentration limits to minimize the use of the chemical as much as possible and reduce the toxicity of the same. Currently, HBCDD can be used only after obtaining authorized permits from the latest amendment. It can possibly be used for expanded polystyrene for building insulation. The amendment will go into force on the 30th of September, after which it will be prohibited. This will also give manufacturers and companies enough time to adapt to new requirements.
The flame retardant market is an emerging industry in several regions across the world. With several legislations that have brought the use of retardants to light and spread active awareness through safety protocol, the industry is set to scale new heights. The global market was valued at US$6,558 mln in the year 2015. This figure is expected to rise and earn greater revenues in the near future. The regulations that call for the use of non-toxic and pollution-free flame retardants have encouraged the R&D activities to develop special resins that can withstand heat and flames naturally, without causing an environmental impact. The market witnessed an exponential growth in its size as a large number of companies are establishing their presence in various regions of the world.
A close observation of the market in 2015 revealed that the Asia-Pacific and Latin America & Middle East (LAMEA) regions together accounted for half of the total flame retardants market. This trend is expected to continue, owing to the increase in infrastructure development in emerging economies, such as India, Brazil, and China. The countries of Asia-Pacific are projected to maintain leading positions till 2022, with a supporting CAGR of 7.1% during the analysis period of 2016–2022. This upswing in trends can be attributed to the increase in awareness of flame retardants, coupled with the enforcement of safety regulations upon end-user industries. The European region is also not far behind in the race. Germany is estimated to exhibit the fastest growth of 6.6% till 2022, in terms of market share and value. This is mainly due to the rise in per capita disposable incomes of consumers, who are further responsible for the greater demand for flame retardant automobiles. The global flame retardants market is an emerging market that will eventually climb the ladder of success in the immediate future. Conforming to safety protocols and regulations by environmental bodies, the application of flame retardants is expected to win approval from several industry verticals. It is very likely that the use of eco-friendly halogen-free flame retardants will gain popularity and give a facelift to the global market.

As per Grand View Research, the global flame retardant market size was valued at US$6.29 bln in 2015. The growth of key end-use industries such as construction, electrical & electronics, and transportation is expected to drive the growth over the forecast period. These industries are increasingly using FR based materials to fulfill regulations concerning fire safety and prevention. Governments across the globe have been focusing their attention on fire prevention which has resulted in the formation of stringent regulations and guidelines. These regulations encourage the use of flame retardant materials thus driving the overall growth. Proactive attempts from key end-use industries to avoid mishaps caused due to fire are also expected to aid industry growth. They cover a broad range of chemicals which prevent the spread of fire and increase the escape time by delaying it. They are either mixed with a material or can be chemically bonded to it. They are used in plastics, surface finishes, coatings, and textiles.

Global flame retardant market revenue, by application, 2014 - 2025 (US$ Million)
Global flame retardant market

Non halogenated type dominated the segment in 2015 with demand exceeding 1,400 kilo tons. It is expected to continue its dominance over the forecast period owing to regulations aimed at phasing out halogenated flame retardant usage.
Brominated type dominated the halogenated products demand and occupied more than 40% of it. In non halogenated type, Aluminum hydroxide demand was over 900 kilo tons in 2015, the largest in the segment. It is expected to grow at an estimated CAGR of 5.7% over the forecast period.


Global non halogenated flame retardant market revenue, by product, 2014 - 2025 (USD Million)
Global non halogenated flame retardant market

Polyolefin was the largest application segment in 2015 and accounted for more than 20% of the market. Polyolefins are widely used in industries such as electrical & electronics and construction. They have been found to possess high flame retardant loading capacity. All these attributes are contributing for the application segment, and it is expected to witness the highest CAGR of 5.5% from 2016 to 2025. Epoxy resins demand was around 600 kilo tons in 2015 and is expected to grow at an estimated CAGR of 5% over the forecast period. Epoxy resins find widespread usage as an adhesive, coatings and as composite materials in construction as well as electrical and electronics industries.
Regarding demand, electrical and electronics dominated the end use segment with a demand of over 1,000 kilo tons in 2015. Electrical and electronics products are subject to high degree of fire risk owing to the involvement of electric currents in their functioning. Flame retardants are used to reduce this risk in a broad range of products such as laptops, smartphones, TV sets, refrigerators, vacuum cleaners and printed wiring boards. Rising disposable income is catering to the growth of electrical & electronics segment growth, and this trend is expected to benefit the industry over the forecast period. Construction end use worth is projected to grow at an anticipated CAGR of 6.8% from 2016 to 2025. The construction industry has undergone transformation and flame retardant infused materials such as plastic & structural insulation, and structural elements are increasingly being used along with conventional ones. Rising urbanization, government initiatives to provide affordable housing have benefitted the industry in the recent past, and this trend is expected to continue over the forecast period. This growth in the construction sector is projected to cater to a demand rise for flame retardant. Asia Pacific emerged as the largest consumer and accounted for over 45% of total volume in 2015. High demand from countries such as Japan, China & India is benefitting the overall regional market. The presence of electrical & electronics manufacturing hubs, positive growth in the construction sector and significant presence of automotive industry in the region are expected to benefit the growth in the region. Europe regional market demand was over 600 kilo tons in 2015. Strong regulations about fire safety, massive industrialization, and widespread awareness have benefitted the regional market. Central & South America demand is expected to grow at an anticipated CAGR of 5.3% over the next nine years.

As per Freedonia, world demand for flame retardants is estimated to increase 4.6% annually through 2018 to 2.8 mln metric tons, valued at US$7 bln. 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 percent 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.

As per Global Market Insights,flame retardant chemicals market size was over US$7.5 bln in 2015 and is likely to gain 4.5% CAGR up to 2023 register above US$10 bln. Flame retardants market size may reach over 2.9 mln tons by 2023 with expected gains at over 6% CAGR.
Asia Pacific flame retardants market size, led by China & India, dominated the regional industry and accounted for over 42% of the overall demand in 2015. Asia Pacific dominated the market over the past few years, followed by Western Europe and North America. Asia Pacific is forecast to register the highest growth owing to enormous potential that can be discover in near future because in the increase of safety concerns and growth of many end-use industries in the developing countries. India and China are analysed to be the future prospective market due to the increase in urbanisation and rising personal income. North America, led by U.S. accounted for over 21% of the overall share in 2015. While Europe, led by UK, Germany & France, accounted for over 19% of the total volume in 2015. These products are used in thermosets, thermoplastics, paints & coatings building & construction, adhesives, and various other forms of plastics such as, textiles, coatings polyolefin and PVC. Key flame retardant chemicals type include, brominated, chlorinated, organophoshorus, nitrogen, aluminium hydroxide  and antimony oxide.
 Rise in fire safety norms in construction and automobile industries may stimulate product demand. Increase in construction spending particularly in Asia Pacific may drive product demand. China construction spending was over USD 1.7 trillion in 2014, followed by Japan and India with over US$739 bln and US$421 bln respectively in the same year. North America demand may rise at a faster pace than other developed regions due to a forecast rebound in the US construction market, but will remain below the global average. Flame retardant chemicals market may witness strong growth in construction applications up to 2023. Construction application may account for over 25% of the overall volume by 2023. National Fire Protection Association (NFPA) regulated fire safety standards in the U.S., Similarly, The Confederation of Fire Protection Association (CFPA) lays out the fire safety & resistance standards for building construction in Europe. These norms are the propelling factors for product demand to rise. Increasing plastic usage for automobile production owing to growing fuel efficiency demand and limiting carbon emissions may favour flame retardant chemicals demand. Automobile sale recorded over 85 mln units in 2014 and is forecast to register 100 mln units by 2018. Indonesia and Thailand are likely to witness an increase in automobile production owing to favourable government policies for OEMs, which may drive product demand. In Electrical & electronics (E&E) applications, the product supports in the production of laptops, cell phones, battery chargers, refrigerators, washers, dryers and vacuum cleaners. This may enhance flame retardant chemicals market size. Flame retardant chemicals market size may rise owing to increase in manufacturing output, especially in Europe, U.S. and Japan with expected recovery post economic downturn. Stringent regulations owing to environmental hazards may restrict flame retardant chemicals market growth. However, eco friendly product developments may pave opportunities for market development.
Non halogenated flame retardant chemicals are attaining more consideration as they are environmental friendly. It results in the downfall halogenated product demand as they contain highly toxic. This is observed in North America and Europe owing to stringent rules and regulations. Global non halogenated flame retardants market is expected to reach USD 2.5 billion by 2023 and it is expected that halogen based products will be banned keeping in the concern of human health and environmental hazards. The industry in the current scenario is facing issues with the increase in raw material and manufacturing cost. This factor may impact flame retardant market price trends. Global flame retardants market share is fairly competitive and comprises of MNCs. Notable industry participants include Dow Chemical, Clariant, Lanxess, BASF, Akzo Nobel, Albemarle and DuPont.

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