Industry Insights
The global phenol market size was USD 11.75 billion in 2016 and is expected to grow on account of its commercial viability and rising demand for its derivatives such as epoxy resins, polycarbonates, nylon, Bakelite, detergents, phenolic resins, pharmaceutical drugs and herbicides. Moreover, the primary derivative from the phenol is bisphenol-A which is anticipated to boost the market over the forecast period.
Global phenol market volume by end-use, 2014 - 2025 (Million Tons)
Cumene oxidation is one of the most important and common technologies used for manufacturing phenol. Phenol is a scented compound which is also called as carbolic acid. As a result of increasing commercial viability, phenol which was extracted out of coal tar is now being obtained from petroleum as well.
Additionally, other factors driving growth is the expansion of the wind energy market. Epoxy resins, a derivative of phenol are used for coating of wind turbine power generators.
Phenol manufacturing companies are expanding their presence globally by entering into agreements, partnerships and mergers & acquisitions to cater to the growing global demand. For instance, in February 2014, INEOS Phenol and Sinopec YPC signed a joint venture agreement to build the largest phenol & acetone manufacturing plant in China to meet the rising demand for petrochemical products.
The industry is restrained owing to its toxic nature via oral exposure and is harmful to the external environment. However, certain regulations and norms provided by environmental associations in individual countries to utilize the biological degradation method over chemical oxidation and solvent extraction method for the removal of phenol from the industrial waste without formation of the harmful byproducts are expected to drive growth.
Segmentation by End-Use
• Bisphenol-A
• Phenolic Resins
• Caprolactam
• Others
Bisphenol-A contributed 49% of the market share regarding revenue in 2016 and is expected to be the key end-use segment during the forecast period. Bisphenol-A is primarily used for manufacturing epoxy resins and polycarbonate. These high performing materials are being increasingly used in consumer electronics and industrial applications which are expected to grow the market over the forecast period.
Polycarbonate is a lightweight, highly resistant, and optically clear plastic which exhibits excellent electrical and heat resistance. It is extensively used for manufacturing back panels in laptops, televisions and smartphones.
Moreover, caprolactam has been witnessing growth as result of its growing demand for the production of nylon fibers for industrial yarns, carpets and textiles. Rising demand for nylon for manufacturing technical textiles, carpets, and molded parts is expected to drive the growth of the market subsequently. The phenol industry for manufacturing caprolactam is projected to grow at a volume CAGR of 3.9% from 2017 to 2025.
Segmentation by Region
• North America
• U.S.
• Europe
• Russia
• Asia Pacific
• China
• India
• Central & South America
• Brazil
• Middle East & Africa
Asia Pacific dominated the market with the highest revenue share of 42.3% in 2016. China has been the largest producer and consumer of phenol and its derivatives and is expected to drive the demand over the forecast period. Moreover, China has the advantage of lower operating costs as compared to the other countries. Hence, it has rapidly ascended as a global petrochemical product producing hub. There is an opportunity to install production facilities in China to cater to the growing domestic demand.
European and North American markets are flourishing at a slow rate and are anticipated to maintain the trend over the forecast period owing to the strict environmental and government norms. The shift in manufacturing bases from these regions to China and India on account of low production cost and high-profit margins is expected to impact the market growth. Furthermore, phenol is imported in bulk from China on account of its low cost despite the customs duty.
Competitive Landscape
Companies have been adopting various organic and inorganic strategies which include acquisition and expansion to increase their market reach. The leading players operating in the phenol market are INEOS Phenol, Mitsui Chemicals, Aditya Birla Chemicals, PTT Phenol, CEPSA Quimica, Shell Chemical, LG Chem, Honeywell Resins & Chemicals, Shandong Sheng Quan Chemicals Co. Ltd and SABIC Innovative Plastics.
