The global phenolic resins market size was valued at USD 13.24 billion in 2020 and is expected to grow at a CAGR of 5.4% during the forecast period. The global phenolic resins industry is anticipated to be driven by the development of unique impregnated materials such as laminates, fabrics, oil & fuel filters along with expanding wood adhesive applications that are presenting new avenues for market growth across the globe.
Expansion of end-use industries such as automotive, construction, and consumer electronics is likely to drive demand for these unique resins. A rise in consumer spending levels and expansion of the construction & automotive industries, especially in the Asia Pacific to drive market growth.
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Numerous phenolic resin manufacturers are actively introducing innovative products and improving their existing technologies to gain a competitive edge in a mature yet growing market for phenolic resins. 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 a low-cost strategy and balanced operations in order to optimize capacity.
The lightweight, porosity, and sustainability of phenolic resins have fostered their demand for insulation foams across the emerging markets. High heat & chemical resistance, flexibility, and sliding properties are anticipated to further promote phenolic resins demand in the market in several end-use industries.
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, the product suppliers themselves have also integrated backward to begin manufacturing of novolac and resol 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, application, end-use, and region.
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Novolac resins are expected to emerge as the fastest-growing product since resins are most impregnated onto oil filter papers for application in the automotive market. They exhibit high air permeability and improved bursting strength of up to 15% higher than others impregnated by poly-styrene-acrylate (PSA) latex. The development of unique products allows the formation of impervious bonding matrices with fillers and substrates to form protective coatings.
In terms of shelf life, novolacs display an infinite shelf life as compared to resoles who have a shelf life of up to one year. As compared to resoles, novolac resins are much dimensionally stable. All these inherent advantages have benefitted the segment market demand in the past, and this has resulted in novolacs emerging as the largest product market segment in 2020.
The resols market segment has witnessed rapid growth in China owing to increasing demand for insulation in applications concerning energy conservation from buildings, refrigerators, water heaters & automobiles. Market factors such as environmental stability, energy conservation, versatility & unique physical properties are driving the segment growth in the Asia Pacific. Construction has also emerged as a leading end-use industry in North America.
Other phenolic resins include modified resins, spray-dried resins, cyanate ester resins, and benzoxazine resins. Spray drying produces resins in particulate form. The particles are hygroscopic owing to their high caustic content but are sinter resistant when kept dry. The principal application for these types of products is wood binding, especially for wafer board applications.
Wood adhesives were 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) is expected to drive 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 the 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 are driving phenolics demand in the construction & industrial sectors.
The phenolic insulation is manufactured by the mixture of high solids and phenolic resin and by adding a surface-acting agent. Phenolic insulation products exhibit good insulating properties, and they can be more effective than compared to other insulation materials. It is lightweight, easy to transport, handle and install.
The phenolic laminates are extremely versatile on account of their unusual combination of properties such as lightweight, structural strength, and moisture resistance. Additionally, their high dielectric strength and strength in thin sections make them easy to punch and shear for various electrical applications.
Phenolic resins show strong application as a wood binder used in the building & construction sector. The product is also known as phenol-formaldehyde resin, formed from the reaction of phenol and formaldehyde. This is used as a filler in construction market applications.
The product is produced using two different catalysts during the polymerization process. These are known as resole and novolac. Due to saturation in other applications, industry players are expanding their application in construction and building applications.
Phenolic resins have a broad range of applications in the automobile sector to enhance formability, vulcanization, and reinforcement. The product offers high friction resistance, adhesive performance, and superior heat resistance. This allows using the product in clutch plates, brake linings, and disc brake pads. The requirement from OEM as well as aftermarket sales will thereby enhance the phenolic resin market size over the forecast period.
The automotive & electronics market 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 the recovery of developed countries from the recession of recent years are likely to remain macro-economic drivers for the expansion of the phenolics market.
The Asia Pacific emerged as the largest market in 2020, 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 the automotive sector especially in countries such as India and China are benefitting the market growth.
The North American phenolic resins market consists of three major countries, namely the U.S. and Canada. The U.S. dominated the regional market owing to the high demand for phenolic resins from several major end-use industries such as construction, automotive, and electrical & electronics. An open investment policy, highly skilled workforce, advanced infrastructure, and government incentives promoting manufacturing activities also encouraged phenolic resins to demand growth in the U.S. market.
Solid resols are anticipated to remain the dominant segment owing to the burgeoning demand for abrasives and powder coatings in the aerospace & automotive industries of Europe. Higher consumer confidence and shift in socio-economic trends as well. Improving phenolics quality & increasing awareness regarding fuel economy are some other factors driving the European solid resols market.
Russia holds a notable share in the production of phenolic resins. The production of the phenolic resins is obtained by polycondensation of phenols and other products used in formaldehyde or its derivatives. Increasing construction activities in the country implementing phenolic resins as a binder for wooden works.
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.
Manufacturers such as Georgia Pacific are also integrated along the value chain to distribute and supply these resins as a means to reduce logistics costs, provide timely product delivery, boost customer support services, and gain a competitive edge in a relatively mature market. Other phenolic resin distributors in the North American market include the American subsidiaries of major international companies such as Sumitomo Bakelite and Mitsui Chemicals Inc. and even regional players such as Tango Engineering.