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January 11, 2010
Volume 88, Number 2
p. 14

World Chemical Outlook

Specialties: 2010 Will Be All About The End Market

Marc S. Reisch

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The specialty chemical business has yet to recover in the U.S., says T. Kevin Swift, senior economist at the American Chemistry Council, a chemical industry trade association. U.S. production of specialties—including paper additives, inks, cosmetic chemicals, plastic additives, and detergent ingredients—dropped almost 15% in 2009 compared with the year earlier. And Swift doesn’t see them improving by more than 1% in 2010.

Likewise, Frederick M. Peterson, president of chemical industry consulting firm Probe Economics, says economic recovery in 2010 will mean some demand increases for specialty chemicals, but he doesn’t expect a robust rebound while banks remain cautious and consumers continue to pinch pennies. For these reasons, plastic additives used in cars, televisions, refrigerators, and other durable goods are not likely to do well in 2010. But plastic additives used for steady-selling nondurable goods, such as food packaging, are likely to do better.

Other specialties will suffer more because of technology trends than consumer affordability. Many past devotees of the printed word now are getting their news from the Internet or electronic readers such as Amazon’s Kindle, meaning less demand for printing inks, says Ray Will, a senior consultant at SRI Consulting.

Will sets the global printing-ink market at about 
4.2 million metric tons in 2008 and expects it to grow by less than 1% annually over the next five years. For the same reasons, he expects lower demand in the future for paper additives, which he projects will decline at an average annual rate of 0.2% between 2008 and 2013.

Cosmetic chemical suppliers just witnessed a year in which their luxury-brand customers experienced a 30% drop in sales compared with 2008, says Gillian Morris, director of chemicals and materials at consultants Kline & Co. But mass-market cosmetic makers saw only a small decline in sales last year, and it’s now business as usual for them and their raw material suppliers, both of which hope to maintain market share gained from luxury brands.

With little or no growth expected for personal income in developed countries, shopping patterns have changed to an emphasis on “value brands,” says Eunice Heath, general manager of Dow Chemical’s home and personal care business. In those countries this year, demand for surfactants and other ingredients for personal care and laundry products isn’t likely to grow more than 5% over 2009 levels, Heath says. But in developing markets such as Brazil, China, and other Southeast Asia countries, demand is “robust” and likely to grow between 5 and 10%, she says.

Chemical & Engineering News
ISSN 0009-2347
Copyright © 2011 American Chemical Society
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