The global Phenolic Resins market size was valued at USD 12.63 billion in 2019 and is anticipated to grow at a CAGR of 5.4% during the forecast period. Expansion of end-use industries such as automotive, construction and consumer electronics is likely to drive demand for these unique resins. Rise in consumer spending levels and expansion of the construction & automotive industries, especially in Asia Pacific to drive growth.
Numerous phenolic resin manufacturers are actively introducing innovative products and improving their existing technologies to gain a competitive edge in a mature, yet growing phenolic resins industry. The market presents ample opportunities for new entrants who can introduce unique applications and products at economical prices, since a majority of players tend to adopt low-cost strategy and balanced operations in order to optimize capacity.
Lightweight, porosity, and sustainability of phenolic resins have fostered their demand in insulation foams across the emerging market of Mexico. High heat & chemical resistance, flexibility, and sliding properties are anticipated to further promote phenolic resins market demand in several end-use industries. Governmental regulations and legislations promoting energy efficiency in the U.S. have also driven phenolic resin demand in impregnated materials, specifically in the transportation and constructions sectors.
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Growing demand for low density materials that offer good thermal insulation, outstanding durability and ease of formability to complex contours are being utilized to design innovative ‘green building’ spaces for the commercial and residential sectors. The energy crisis across the globe has prompted the construction of such energy-saving projects, utilizing lightweight materials which are sustainable, such as phenolic resins.
Furthermore, phenolic product suppliers themselves have also integrated backwards to begin manufacturing novolac and resol resins themselves. Such a strategy significantly lowers logistics costs & procurement hassles for these companies in the long run. Consumers are increasingly becoming more aware regarding product benefits and technologies, which has compelled suppliers to maintain high quality levels by integrating themselves into production.
The market is primarily segmented on the basis of Product, By Application, By End-Use and Geographic region.
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Novolac resins are expected to emerge as the fastest growing product since resins are most commonly impregnated onto oil filter papers for application in the automotive industry. They exhibit high air permeability and improved bursting strength of up to 15% higher than others impregnated by poly-styrene-acrylate (PSA) latex. Development of unique resins allows the formation of impervious bonding matrices with fillers and substrates to form protective coatings
Resol segment has witnessed rapid growth in China owing to increasing demand for insulation in applications concerning energy conservation from buildings, refrigerators, water heater & automobiles. Factors such as environment stability, energy conservation, versatility & unique physical properties are driving the segment growth in Asia Pacific. Construction has also emerged as a leading end-use industry in North America.
Wood adhesives was the dominant application for these resins, particularly on account of rising consumption in furniture, luxurious consumer goods, and other products. Extensive R&D to introduce unique products such as cross-laminated timber (CLT) are expected to drive phenolic resins consumption over the near future, especially owing to increasing construction spending and its application in this sector.
Molding applications are anticipated to emerge as the fastest growing market segment, owing to chemical resistance provided by this material in high temperature or aggressive environments. It is widely used to manufacture components such as abrasive grinding wheels, friction linings, refractory products, and others. Government initiatives to foster domestic manufacturing activities is driving phenolic resins demand in construction & industrial sectors.
Expanding end-use industries in Asia Pacific market, particularly automotive & construction, owing to government support in the form of incentives, subsidies and tax schemes are encouraging phenolic resins applications in these sectors. Consumers are also increasingly becoming aware regarding the advantages of phenolics, including excellent flame retardancy, heat & chemical resistance, and electrical non-conductivity.
Furthermore, growing demand for low density materials that offer good thermal insulation, outstanding durability and ease of formability to complex contours are being utilized to design innovative ‘green building’ spaces for the commercial and residential sectors across the global market. The energy crisis across the globe has prompted the construction of such energy-saving projects, utilizing lightweight and sustainable materials, such as phenolic resins.
The automotive & electronics industry has also realized the benefits of phenolics to foster lightweight automobiles that can contribute to lower carbon emissions and reduce the consumption of fuel via improving engine efficiency. Additionally, improving GDP growth rates in emerging economies and recovery of developed countries from the recession of recent years are likely to remain macro-economic drivers for the expansion of phenolics market.
Asia Pacific emerged as the largest market in 2019, both in terms of volume as well as value. The region is expected to maintain its dominance over the forecast period. Improving economic conditions in the region, government initiatives to boost key end users of phenolic resins such as the construction sector, and strong presence of automotive sector especially in countries such as India and China are benefitting the market growth.
Latin America has witnessed weak economic growth over the past few years owing to numerous political issues and failure of governments to bolster the institutional framework and combat corruption. However, the future prospects are likely to improve in the light of higher real wages, improved business sentiments and stronger regional GDP growth. These factors are likely to positively influence the growth of end-use industries consuming phenolic resins and other phenol derivatives.
The leading players in the phenolic resins market include Owens Corning, Arclin Inc., Ashland Inc., DIC Corporation, Hexcel Corp., Georgia Pacific Chemicals, Kolon Industries Inc., Momentive Specialty Chemicals, Sumitomo Bakelite Co. Ltd, Olympic Panel Products LLC, BASF SE, SI Group Inc, Hexion, Asahi Kasei, GUN EI Chemical Industry, Kangnam Chemical Co. Ltd., Changchun group, DYNEA, Zhejiang Hangmo, Yushiju Chemical, Hitachi Chemical Co. Ltd., Arizona Chemical Company LLC , and Red Avenue New Materials.
These players are expanding their presence across various geographies and entering new markets in developing regions to expand their customer base and strengthen presence in the market. The companies are also introducing new innovative products in the market to cater to the growing consumer demands. Such trends are proving beneficial to the overall phenolic resins industry growth.