Cellulose Derivatives

Global Market Outlook on Cellulose Derivatives

Global Demand Cellulose Ether (2016-2021F)

• Global supply of cellulose ethers is sufficient to meet the increased demand from varied industries. Hence, no supply crunch is expected in the near future. The cellulose ether market is the fastest growing segment among other polymeric additives, driven by its application in number of industries such as personal care, pharmaceuticals, food, construction, detergents and others
• The global cellulose ether market is dominated by players from the developed market, i.e. Dow Chemicals, Ashland and Shin-Etsu, together accounting for about 50-60% of the global market share of cellulose ethers.
• Under cellulose ether category, Carboxymethyl Cellulose Sodium is the most widely consumed, contributing to 55-60% of total cellulose ether consumption, followed by MC, HEC, HPMC, HEMC, etc. With respect to CMC, the market is consolidated with four major players, CP Kelco, Ashland, and Dow, accounting for about 75% of the global market share
• After Asia Pacific, US and Europe are the major consumers of cellulose ethers. The global market for cellulose ethers is projected to grow at a CAGR of 4% Y-o-Y from 2018 to 2021

Cellulose Ethers – Global Demand by Application

• Each cellulose ether caters to different applications with its different percentage of consumption in end-use segments and different grades are supplied by different cellulose derivative suppliers. Growing demand from pharmaceuticals, personal care, and construction sectors drives the demand for cellulose ether and its derivatives
• For example, industrial grade CMC/HPMC can be supplied by many suppliers as its production does not require high level of specialization. However, pharmaceutical/cosmetic/food grades can only be supplied by limited set of suppliers (highly consolidated), who have different production lines with GMP certification. Also, the cellulose ether industry is currently underutilized and has enough capacity to meet demand in case of a supply shortage
• Hence, sudden increase in demand from one industry does not impact the supply of cellulose ethers in other alternate industries

Regional Market Analysis – North America

Demand Trends:

• Methyl cellulose and HPMC will retain market share with largest application in the construction industry, followed by HEC and CMC
• Strong demand for cellulose ether from pharmaceutical application is also driving this market

Supply Situation:

• In North America, local production of CMC is unable to meet the demand, so they depend on China and other European countries like Germany, Finland and Netherlands

Future Market Trends:

• Regional capacity expansion in Asia and Brazil by the major suppliers to meet the growing demand and to have better control on the supply chain
• Suppliers are competing with Chinese players on price of industrial grade cellulose derivatives

Regional Suppliers of Cellulose Ethers:

• Ashland, Dow Chemical and CP Kelco

HEC and its Derivatives Market Outlook

• Hydroxyethyl Cellulose (HEC) and its derivatives market was highly dominated with three major players, Dow Chemicals (48 percent), Ashland (27 percent), and Shin-Etsu (16 percent) in 2017
• In April 2015, Ashland expanded its Virginia HEC capacity by 4,700 tons
• In 2012, ShinEtsu announced a new manufacturing plant for HEC in Louisiana, US. The current capacity of HEC will increase from 16,000 tons (Germany facility) to 25,000 tons (Germany and US)

Other Suppliers - HEC:

• Daicel Chemical (3 percent)
• China Ruitai (2 percent)
• Shandong Head (1.2 percent)

HEC – Key Market Drivers

Paints and Coatings

• HEC provides an outstanding thickening property for interior and exterior coatings as well as latex paints
• The enhanced end use benefits such as improved wash resistance and thickness, without increasing the cost parameter are the key paybacks for using HEC
• New infrastructural development in emerging economies and infrastructural conservation activities in developed economies drives HEC demand

Personal care

• HEC acts as a thickener, stabilizer, binder and dispersing agent in cosmetics and personal care products
• A very high purity grade goes for this application
• Increasing disposable income and changing lifestyle are the key factors that drive the cosmetic and personal care industry in developing nations

Oil Field Applications

• Owing to the non ionic nature of HEC its used as dispersing agent in oil drilling application where salinity tends to precipitate other viscocifier fluids
• Asia pacific especially China is driving the HEC market owing to the increasing oil well drilling activities