Industry Insights
The global naphthenic acid market size was valued at USD 55.6 million in 2017. It is estimated to register a CAGR of 2.5% over the forecast period. Growing demand for wood in different applications including, furniture, home interiors, and infrastructure is expected to increase the consumption of naphthenic product forms as preservatives for enhancing the durability of the finished goods.
Global naphthenic acid market revenue, 2010 - 2025 (USD Million)
Demand for solvent-based wood preservatives will increase in developing countries including China and India owing to low price and high market visibility through established distributor partnerships of multinational companies. High spending in the construction sector in developing countries is also expected to offer growth opportunities for the market.
In Dubai, average spending on wood and timber based product was around USD 2,700 per home in 2017. In the same year, more than 100,000 hotel rooms and service apartments were under construction. According to the U.S. Census Bureau, 12,000 out of 14,000 multifamily buildings constructed in 2017 had wooden frames, which accounted for around 85% of the total multifamily buildings constructed during 2017.
In addition, out of 613,000 single-family homes sold during 2017 within U.S., 556,000 were made of wooden frame. This development in the construction industries of UAE and U.S. is expected to promote the application in new residential buildings thereby fueling the demand for naphthenic acid-based wood preservatives.
Segmentation by Product
• Refined
• High-purity
The demand for refined naphthenic acid was 51.8 kilo tons in 2017 and is expected to account for over 95.0% of global share by the end of 2025. Naphthenic acid has emerged as a cost-effective alternative to phosphate ester owing to its excellent anti-scaling properties. Increasing R&D activities by manufacturers to develop advanced product to cater to customer-specific requirements will also contribute toward growth of the naphthenic acid industry.
High-purity naphthenic acid is commonly used by chemical research labs of schools and colleges and various industries including automotive. U.S., Germany, and other developed countries have a number of R&D institutes due to easy availability of advanced lab equipment and servicing support on a domestic level. This factor is expected to spur the segment growth over the forecast period.
Segmentation by Application
• Wood Preservatives
• Paints and Ink Driers
• Fuel and Lubricant Additives
• Others
Wood preservative was the largest application segment in 2017. It accounting for 37.5% of the global share. These products are used to enhance the life span of wood-based products by protecting them from decomposition, decaying, fire, microbes, and insects. As a result, naphthenic acid is expected to find application as an additive in the formulation of wood preservatives on account of high stability.
According to the China National Bureau of Statistics (NBS), in 2017, total revenue of furniture manufacturing companies expanded at a rate of 10.1% to USD 132.52 billion, while the gross profits have grown at a rate to 9.3% to USD 8.27 billion. Rising spending on home decoration in China, on account of improved of standards of living, has increased the demand for luxury furniture. This, in turn, will promote the consumption of naphthenic acid.
The product is used as an anti-corrosive agent during the production of jet fuel. Positive outlook towards aerospace and defense sector in U.S., China, and Russia due to recent allocation of budgets by regional governments to increase the production of military aircrafts is expected to have a strong impact on market growth. Constant Year-On-Year (YOY) increase of 3-4% in air-travel owing to rising consumer disposable income levels, especially in China and India, will have a positive impact on the naphthenic acid market.
In 2016, around 3.7 billion people opted for air travel and every year half of the travelers, who cross international borders, travel by air route. This trend is expected to promote the usage of naphthenic acid as an additive in the near future.
Segmentation by Region
• North America
• Europe
• Asia Pacific
• Rest of the World
North America held the largest market share of 28.2% in 2017. Increasing popularity of patio and deck furniture and wooden building structures in U.S. is also likely to contribute toward market development. As of 2017, the average per capita spending on patio and deck was around USD 7,000 in U.S.
Competitive Landscape
Some of the key companies in naphthenic acid market include Midas, Fulltime, Karvan-L, and Shenyang Zhangming Chemical Co. Ltd. The global market is highly consolidated with Merichem Company, Inc. accounting for a major chunk of the global share. Merichem is sole supplier in U.S. The company offers customized products including crude, semi-refined, high-purity, and customer blend. Germany, U.K., and Belgium are the major consumers in Europe. The regional market in Europe is lead by Umicore N.V. The company also has a few established distribution centers in other regions including India and China.
