Polycarbonate Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Polycarbonate

• The global demand is expected to grow at 3.4 percent CAGR through 2017–2022
• The PC demand for CPG applications is expected to grow at a CAGR of 4 percent and reach 0.34 MMT by 2022
• Blends of PC with other polymers, particularly ABS, polyester, and thermoformed PC films are expected to be the demand drivers during the period
• Polycarbonate market analysis shows that the major supply markets and respective shares are North America: 15 percent, EU: 23 percent, Asia: 59
  percent, Others: 3 percent.
• Challenges/opportunities of the polycarbonate industry include increasing demand for “smart” electronics and devices that would in turn increase PC
  demand.
• New revolutionary technologies in the medical segment, such as sensors, LED luminaires and service robots, are expected to drive PC demand.

Demand Market Outlook

Even though the global PC market is currently oversupplied, the absence of required additions in line with the expected improvement in demand may lead to high operating rates within the suppliers

Industry Best Practice

Engagement Models

• Direct buying is the preferred engagement model in the industry
• CPG companies outsource its packaging requirements to the converters, as it helps to focus on its core business
• Consortium buying is not a common practice for the CPG players in the resin market

Contract Models

• Market Price Contract: The supplier supplies the commodity at a market price or benchmark price
• Fixed Contract: The margin of a supplier is fixed throughout the contract period or fixed price is locked for the contract period
• Contract Revisions: Quarterly contracts are generally preferred in this industry

Pricing Formula

• Based on Monomer Contract Prices

P (PC) = Monthly contract prices for feedstock + Fixed component + Premium

• Based on Index Prices

P (PC) = Resin prices quoted in the index for the month [CMAI/CDI/Platts] +/- margin%

Producer margins are observed to be the highest in North America (20– 25 percent) followed by Europe (15 –18 percent) and Asia (12–15 percent)

P (PC) = Resin index prices for the month + Conversion cost + Margins

Global Market Size: PC

• The global PC market is forecasted to grow at a CAGR of 3.4 percent to reach $14.83 billion by 2022
• Major drivers, such as applications in automobile, electrical and electronics segment, etc., help in the development
• Growth in consumer goods applications is anticipated to remain modest during the period
• The global PC market size was estimated at over $11.63 billion in 2016 with Asia driving the overall demand
• Applications in electrical and electronics segment in Asia is anticipated to favor high growth rates

Global Capacity–Demand Analysis

• PC demand during the forecast period is projected to witness a CAGR of 3.4 percent, owing to growth in electronics, packaging, and medical applications

Market Outlook

• The global PC market has a total capacity of 5.11 MMT, as of 2017
• There has been a high capacity rationalization of PC in the US and Europe in the past, which had created some deficit in production, especially in Europe
• Recently, China witnessed PC capacity addition of 0.27 MMT. This is expected to reduce Asia's PC import dependency by 2020
• Lack of sufficient capacity additions in other regions would push the plants to operate at high rates, as demand is projected to increase at 3.4 percent CAGR

Market Overview

● Polycarbonate market analysis shows that in 2017, 0.49 MMT of supply deficit was observed on a global level
● Exports from Asia were observed to be higher compared to imports during 2017
● Imports and exports remained at the same level in North America, as supply was constrained in the market, due to plant shutdowns
● The import dependency of China is expected to reduce with capacity addition 
● Plants operating at high rates are expected to support the domestic supply levels
● South Korea, Thailand and the US are the major suppliers of the polycarbonate industry with trade surpluses of 0.50 MMT, ~0.40 MMT, and ~0.33 MMT, respectively
● Global exports witnessed an increase of 12 percent during 2018, due to increasing demand for PC from automobile and construction industries
● The polycarbonate price trends show that PC prices in US witnessed a marginal increase of 0.5 percent on a M-o-M basis.

Why You Should Buy This Report

The polycarbonate market research report gives the cost structure breakdown, polycarbonate price trends and forecast analysis. It gives the regional capacity share by suppliers and does a SWOT analysis of major players like Covestro, Sabic IP, Trinseo, etc. It details the polycarbonate industry drivers, constraints and technological innovations.