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Specialties: Above-average demand to be fueled by cars and energy production

by Marc S. Reisch
January 13, 2014 | A version of this story appeared in Volume 92, Issue 2


Specialty chemical consumption will increase at above-average rates in 2014 as manufacturers satisfy demand from industries as diverse as cars, energy, and personal care.

Global specialty chemical output will rise 4.2% in 2014, and another 4.7% in 2015, predict economists at the American Chemistry Council, a trade group. Demand for such chemicals rose 2.6% in 2013.

New bonding requirements are driving the demand for adhesives used to assemble cars, says Michael Robinet, managing director at market research firm IHS Chemical. Automakers, he explains, are shifting away from heavy steel body components to alternatives such as plastic composites and aluminum. To join dissimilar surfaces and speed car assembly, automakers are adopting epoxy- and urethane-based adhesives.

These bonding techniques are gaining ground not only because they are helping to displace steel. They are also benefiting from overall growth in auto demand. LMC Automotive, a vehicle forecasting service, expects North American light-vehicle production to increase 2.5% in 2014 to 16.6 million units.

More cars on the road means greater demand for fuels and the catalysts needed to refine them. The market for fluid catalytic cracking catalysts is set to grow 3–4% annually over the next five years, according to Robert R. Gatte, refining catalysts vice president at W.R. Grace & Co. Demand will continue to be strong in Asia and the Middle East. More recently, the shale energy boom has increased catalyst consumption by North American refiners.

The shale boom is also creating opportunities for chemicals used to extract oil and gas from shale deposits. Ray K. Will, a director at IHS, says he “conservatively” predicts 8% annual growth in sales of thickening agents, drilling sands, and water treatment chemicals to companies engaged in the drilling technique known as hydraulic fracturing. Mexico, where the oil industry is on the cusp of privatization, may be the next big opportunity for shale energy and related oil-field chemicals, Will says.

At the other end of the specialty chemical spectrum, the market for cosmetic active ingredients that deliver antiaging effects will enjoy another year of 5% growth in 2014, predicts Nikola Matic, a manager at consulting firm Kline & Co. Consumption of commodity personal care ingredients such as surfactants will expand at a much slower pace, he says.



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