Chemical demand growth

As Figure 14 also shows, the only acetylene derivatives to sustain growth during this period were the so-called acetylenic chemicals. These include 1,4-butanediol, vinyl ethers, A/-vinyl-2-pyrroHdinone, and butanediol. Of these, 1,4-butanediol, a principal feed for tetrahydrofuran, accounts for over 90% of the acetylenic chemicals demand (38). 

A profile of methylene chloride is presented including US production capacities, demand, growth rate, price, uses, strength, weakness and outlook. Paint stripping and removal accounts for 30% of MeC by end-use application, adhesives 20%, metal cleaning 10%, aerosols 10%, pharmaceuticals 10%, chemical processing 10% and flexible PU foams 5%. Because of occupational concerns, users of MeC are under pressure to limit use, restrict... 

In the context of chemical production, a process innovation may be defined as an addition to knowledge which allows some quantity of output to be produced by an input combination that could not previously be used to produce that output. For an innovation to be economically interesting, the innovation should result in a lower cost of production than other techniques at some combination of input prices. Whether the Innovation is actually used in production will depend on a host of factors, including the patterns of input prices which producers face and the desirability of adding to capacity at the time that input prices favor the innovative technology. This last point assumes —often realistically, for chemical processes—that innovations frequently require changes in plant and equipment that would be undertaken only if justified by expected demand growth. 

We noted earlier that commodity chemicals have earned superior returns to other commodity industries. Closer analysis that we have undertaken of the key differentiating factor behind chemicals higher profitability compared to other commodities shows it to be the recurrence of fly-ups, resulting from robust demand growth, limits on low-cost new capacity, and relatively flat cash cost curves. 

Determining the full cost of the type of capacity needed to meet demand growth is the cornerstone enabling managers to assess how attractive the returns are likely to be for their business in a given commodity chemical sector. However, it is also possible to dig deeper into the circumstances of individual plants and product lines, production sites, and geographic regions to build up a more detailed picture of the prospects for a business. Here are a number of key drivers that need to be taken into account. 

However, while stranded gas supplies are essentially unlimited, access to low-cost ethane for ethylene plants does have limits. Ethane supplies are developed only with natural gas or crude oil production regional consumption and LNG demand will set the demand for natural gas, while OPEC will determine crude oil output. We estimate that the available ethane in the Middle East could only cover about 40 percent of all new worldwide ethylene demand through 2010, by which date the region s ethylene market share would reach 17 percent. Even if stranded natural gas and ethane in other locations are put to use, they will be far from covering all demand growth, and chemical producers will need to continue to rely on the established types of feedstock, while at the same time considering alternatives (Fig. 16.5). 

Demand Growth of Acrylonitrile Faster than Output Increase, China Chemical Reporter, 14 (30), pg. 18, October 26, 2003. 

Aniline is consumed as a raw material in the manufacture of a number of chemicals /7,/7-methylene diphenyl diisocyanate (MDI), 65 percent rubber-processing chemicals, 15 percent herbicides, 5 percent dyes and pigments, 4 percent specialty fibers, 2 percent. Other uses are in pharmaceuticals and photo chemicals. Principal growth is occurring from demand for MDI and the small, rapidly growing specialty fibers. 

Growing on a sustainable basis in specialty chemicals is very difficult, as a glance at the industry players performance across the different segments reveals. Nevertheless, with the traditional sources of demand growth beginning to dry up, it is essential for chemical companies to make particular efforts in this area. We believe that specialty chemical companies will have to expand beyond their current markets and business models by looking outside their current focus on the chemical molecule. Four different options suggest themselves here. 

That said, there are others factors apart from product maturity that determine whether capacity increments are large compared with demand growth. In most chemical product sectors, minimum economic plant size increases quite rapidly over time as a result of technological innovation, and can lead to very lumpy supply-side additions. On the other hand, when industries become extremely... 

Rapid economic and chemical demands as well as growth in developing economies... 

Ockerbloom and Mitchell (II, 43) pointed out that the shortage predicted by 1970 could be aggravated by factors such as growth of propylene chemical demand even beyond forecast levels and by legislation against lead alkyls. 

Technical publications (examples for the chemical industry are shown in Figure 5.5) should be available and read by employees within the company who have an impact on business decisions so they know what is going on in the marketplace. As they read they need to be looking for their supplier, his competitors, and other products they use. In the Chemical Market Reporter, the chemical profile gives specific information about a chemical. The information includes a producer, which includes a supplier, plant location, and capacity. Other areas discussed are demand, growth, price, uses, strength, weakness, and outlook. All of this information can be very useful as a company evaluates a material and supplier. 

Gibson, J. 2004. Salt demand Growth on the Up. European Chemical News. 81 (August 23) 11. 

Growth in chemicals demand in Commodity-type chemicals... 

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