Global Market Outlook on Dimer Acid

Major producers are large multinational firms such as Kraton Corp, Croda, and Florachem which contribute to approximately 57% of the global dimer acid capacity

  • Capacity additions were planned by Indian producers and Chinese producers during the period 2014-17. There are no further additions announced in the coming years.
  • It is expected that producers would be able to swing their capacities to meet the growing demand for dimer acid, considering the environmental regulations that the Government is imposing in most of the countries

Global Market Size and Outlook

  • Prices for dimer acid increased drastically over the years considering the sudden shortfall in availability of raw material tall oil, however, in the coming years prices are expected to fallback to its previous range
  • Global demand for dimer acid is expected to remain moderate to high at 3-4% CAGR through 2021 resulting in growth in market size over the years
  • No permanent plant closures are expected in the coming years, giving limited leverage for any sudden spike in prices

How is the Demand Trending Across Applications?

Higher rate of growth, based on dimer acid’s environmentally friendly label, is expected to be forthcoming from a broad range of nonpolyamide applications 

  • The nonreactive polyamides find themselves predominantly in hot-melt adhesive applications and flexographic and rotogravure printing inks. The presence of dimer acid in these polymers imparts flexibility, corrosion resistance, impact strength, and water resistance in the finished resin.
  • The hot-melt adhesives market in Asia Pacific is expected to grow substantially over the forecast period and represents high potential opportunities for players in the industry.
  • The dimer acid market in Asia Pacific is characterized by high demand for relatively low-priced offerings namely standard dimer acids. However, over the recent past, demand for high quality end products has prompted several industry participants to turn towards distilled and hydrogenated product offerings. Such product offerings are relatively expensive

How is the Demand Trending for Across Regions? 

  • Asia Pacific dominates the global market in terms of consumption of dimer acid, followed by Europe and North America
  • Asia Pacific is projected to represent a total incremental opportunity of USD 83.2 Million between 2017 and 2025, accounting for nearly 42% share in the overall global absolute dollar opportunity anticipated to be created between 2017 and 2025
  • China is the largest consumer of hot-melt adhesive products owing to a high demand from the manufacturing industry. However, supply of dimer acid in China has reduced drastically due to environmental regulations
  • Trade is also expected to be affected between China and rest of the world as a result of ongoing trade conflicts

Is there Sufficient Supply to Meet Demand ?

No supply disruptions are expected until 2020 owing to sufficient capacity available in the market, amidst moderate demand

  • Vegetable oils such as soybean and corn are witnessing high demand from the food and biofuels industry, resulting in dwindling supplies for dimer acid production. Raw material price volatility owing to limited supply is expected to hinder growth. However, favorable regulations from agencies such as EPA and REACH are expected to provide immense opportunities to major participants over the forecast period.
  • The shift in trend from energy imports to domestic generation, to become self-sufficient and cater to the growing energy demand in emerging economies is also likely to encourage dimer acid applications
  • The industry is highly concentrated with top four companies accounting for over 45% of the overall volume. Some of the key players operating in global dimer acid market include Florachem Corp., Emery Oleochemicals, Aturex Group