Epoxy Resin Market

The epoxy resin market is projected to register a notable CAGR of 5.38% during the forecast period. The major factor contributing to the growth of the global epoxy resin market is increasing application of epoxy resin in the paints and coatings industry owing to its high corrosion resistance and strong adhesion. Furthermore, the surging demand for epoxy-based composites in the automotive and aerospace industries is also expected to boost the global market growth. However, the popularity of favorable substitutes is expected to pose a major challenge to the market players. Also, volatile raw material prices of epoxy resin are expected to hinder the global market growth. Nevertheless, the growing R&D investments to introduce bio-based epoxy resin is likely to create lucrative opportunities for the market players. In addition, the increasing construction activities in the emerging economies of Asia-Pacific and the Middle East & Africa market is further projected to create immense opportunities to the epoxy resin producers during the forecast period.

Polymeric materials are significantly replacing conventional materials used in coating applications. Polymer coating materials consist of a polymer coat and a substrate adhered to each other through a specific coating method. This mixture offers additional properties to the surface and contributes toward the impermeability of liquids, gases, and dust particles. In addition, these coats also provide antimicrobial properties, act as a shield to prevent electromagnetic interference, and improve conductivity.

Epoxy resin finds major applications in the coatings industry due to the exceptional chemical and corrosion resistance, low shrinkage after curing, and low cost. Moreover, epoxy has the ability to firmly adhere to most of the materials such as metals, concrete, glass, wood, stone, ceramics, and leather, which makes it an ideal substance for coating applications. It further exhibits flexibility and high dimensional stability and is widely known for its high tensile strength, modulus, and flexural properties. The growing consumption of vegetable-oil based epoxy resin in coatings would substantially reduce the dependence on petro-based chemicals and further reduce the cost of paints and coatings without disturbing its performance and service life. Epoxy is cured with various curing agents to get the desired coating, which includes­ epoxy amine, epoxy ester, epoxy phenolic, epoxy polyamide, and epoxy coal tar amine. Cured epoxy resin exhibits excellent adhesion to various substrates, chemical and corrosion resistance, high electrical insulation, thermal stability and thus is used as a binder in industrial coatings. It improves the adhesion property as well as increases the resistance to chemicals which is then used to paint chemical storage tanks, and coatings on concrete floors in various commercial and industrial buildings. In addition, it is used as an industrial coating in hospitals, warehouses, garages, and airplane hangars, among others. These coatings are prepared from 1-chloro-2,3-epoxypropane (produced from 3-chloropropene) and substituted phenols, such as bisphenol A and are predominantly used as interior coatings and exterior primers.

In the automotive industry, epoxy resin is widely used as a coating on account of its high mechanical strength, high thermal resistance, and strong adhesion to metals. These characteristics facilitate the protection of car bodywork from corrosion and other significant damages, which further increases the service life of the vehicle. In 2015, about 27,600 tons of epoxy resin were used in Europe per year during the manufacturing stage, of which 22,500 tons were for passenger cars. It is projected that all cars in Europe collectively make around 510,000 tons of epoxy resin. Furthermore, epoxy resin finds application as marine coatings and holds a significant share of the marine industry. These resin are used as a primer, tie-coat, as well as topcoat (for preventing UV corrosion and decorative purposes). In Europe, about 51,000 tons of BPA-based epoxy resin are used yearly in the construction of ships. Moreover, each new ship constructed is likely to use around 24 tons of BPA-based epoxy resin which is expected to propel the growth of the epoxy resin market in the coming years. These resin are also used in ship maintenance and repairs of multiple parts including ballast tanks, decks, underwater hulls, topsides, cargo tanks or holds, and superstructures. These epoxy-based coatings exhibit excellent resistance to corrosion, provide a durable overcoat and also can be conveniently recoated.

Thus, owing to its superior physical properties and strong adhesion to a wide variety of surfaces, there is a surge in the demand for epoxy resin in paints and coatings industry which further boosts the global market growth.

Epoxy resin also finds application in the construction industry, as it offers excellent combination of physical, mechanical, and chemical properties such as low shrinkage during and after curing, high mechanical strength, superior adhesion to building materials, and high abrasion resistance. These superior characteristics are essential for the production of hard-wearing flooring and coatings resistant to water, abrasion, and chemicals; mortars for repairs and loadbearing supports; and adhesives for structural bonding of prefabricated concrete elements. Additionally, epoxy resin are used in grouts for the anchorage of crane rails and machines; anchoring of reinforcing steel, pre-stressing anchors, rock bolts; and repair structures, among others. Precast concrete mixtures on steel girders are incorporated with an epoxy adhesive mortar owing to its high strength and adhesiveness. Moreover, owing to its high compatibility characteristics, epoxy of different molecular weight, type, and reactivity with a wide range of curing agents have the ability to formulate two-component systems for almost any applications in the construction industry. Most commonly used epoxy resin is glycidyl ether of alcohols in building materials.

The expanding construction industry in the developing countries of Asia-Pacific and the Middle East & Africa with the rise in residential and commercial construction has fueled the demand for epoxy resin in these regions. Also, rising urbanization with increasing per capita disposable income and improving living standards is another major factor propelling the growth of the industry. Moreover, investments in commercial construction activities by the government for infrastructural development is further expected to increase the consumption of epoxy resin. According to Invest India, the construction market in India is expected to become the third-largest worldwide and is projected to exhibit a CAGR of 7.1% by the end of 2025. Around 9% of India’s GDP was invested in the construction sector in 2017, whereas the investment in retail projects in tier-1 and tier-2 cities stood at USD 6.19 million from 2016 to 2017. The growing demand for commercial spaces in developing economies of Asia-Pacific on account of growth in the service sectors such as banking, financial services and insurance (BFSI), IT and telecom is boosting the growth of the construction industry, which further increases the demand for epoxy resin.

Additionally, various government initiatives in India such as the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Jawaharlal Nehru National Urban Renewal Mission (JNNURM), and the Pradhan Mantri Aawas Yojana are expected to increase the infrastructural development activities in the country. Also, in December 2016, the Thailand government approved around USD 25.2 billion for infrastructure plan in 2017, which includes railways, roads, and ports. Furthermore, the rise in commercial construction because of increasing construction of commercial buildings such as warehouses, departmental stores, malls, and hospitals, is also supporting the growth of the construction industry in the developing markets. Moreover, the rapidly growing construction industry in the markets in the Middle East & Africa due to the shift from oil-based economy to industrial development together with increasing investment in big infrastructure projects, mainly transport, is likely to drive the demand for epoxy resin in the following years. Furthermore, with the mega-events such as Expo 2020 and FIFA World Cup 2022, UAE and Qatar are expected to increase the number of construction and renovation activities, thereby fueling the demand for epoxy resin in the region. Dubai has allocated USD 7 billion for infrastructure development and construction for the World Expo 2020 while Qatar is spending in the country’s economic transformation program, National Vision 2030. Under the National Vision 2030, the government plans to invest some USD 16.4 billion in infrastructure and real estate projects over the next four years.

Thus, the growing investments in commercial and residential activities in the developing economies of Asia-Pacific and the Middle East & Africa are likely to create lucrative opportunities for the market players during the forecast period.

The major raw materials used in the manufacturing of epoxy resin are epichlorohydrin (ECH) and bisphenol-A (BPA). Raw material prices directly depend on crude oil prices as they are derived from these fossil fuels. Crude oil prices are highly volatile owing to the major influence of the Organization of Petroleum Exporting Countries (OPEC) which controls 40% of the world’s supply of oil. OPEC sets production levels and can influence the prices of oil and gas by decreasing or increasing production. In addition, changes in supply and demand result in fluctuations in the oil prices. When supply exceeds the demand, prices fall and vice versa. Moreover, political turmoil, natural disasters, plant explosion or shut down, and production costs (refining) also affect the prices. Considering all these factors, it can be concluded that the volatility in crude oil prices significantly affect the raw material prices and consequently the price of epoxy resin.

The supply of ECH fluctuated in the second quarter of 2019, especially in China. Moreover, couple of turnarounds during this quarter in North-East Asia restricted ECH supply. The turnarounds are usually carried out due to the need for operational maintenance, renovation, or refitting facilities. The epoxy resin prices in the US have been increasing since the fourth quarter of 2017. For instance, in March 2018, Hexion has increased the prices of epoxy resin and Bisphenol A in North America; the prices escalated at first as domestic supply–demand tightened in the outcome of Hurricane Harvey. Moreover, the prices of epoxy resin will continue to increase owing to the upward pressure from high raw material costs and firm spot import prices. In 2018, the prices of feedstocks BPA and ECH were high in the US and Asia-Pacific and prices declined in 2019. Also, in China, BPA prices escalated and are set to continue to increase on account of tight supply stemming from high downstream demand and anti-dumping measures. Furthermore, spot prices of epoxy resin in China have been moving up steadily due to tight supply, stringent environmental regulations, surging demand, and firm feedstock prices. This has further resulted in soaring prices for imported epoxy resin; thus, producers are relying on domestic feedstock sources for the production of relatively low-cost epoxy resin.

Thus, volatile raw material prices is the major factor likely to hinder the growth of the global epoxy resin market during the forecast period.

BPA-based epoxy has always been the most important coating for lining metal food and beverage cans. Coatings based on these epoxy exhibit superior adhesion to metals and high corrosion resistance, cause no change in flavor and help in increasing shelf-life. In addition to this, these coatings are tough and flexible and allow ease in manufacturing with cost-effectiveness and are further compatible with a broad range of food substances. As a result, BPA-based epoxy are the most significant coatings for the 100 billion food and beverage cans produced in the US each year.

However, growing consumer preference for canned foods with BPA-based epoxy coatings has been declining for a decade owing to the adverse effects of BPA on human health. BPA and related phenolic compounds have a chemical structure similar to estrogen which is known to create endocrine-disrupting potential. Potential hazards of endocrine disruptors are cancer, brain and behavioral changes in infants and fetuses, and female reproductive issues. In California, the US, BPA has been regarded as a cause of reproductive toxicity under a state law called Proposition 65. Growing consumer concerns have resulted in a shift toward favorable BPA-free substitutes for food contact purposes.

A new type of BPA-free epoxy which exhibits the favorable properties similar to those of BPA-based epoxy without the need of any phenolic moieties have been developed. This resin effectively replaces the BPA monomer with 2,2,4,4-tetramethyl-1,3-cyclobutanediol (CBDO), also known as TMCD. It has been developed by Eastman Chemical Company (Eastman) under the brand name Tritan resin. Monomeric CBDO has been tested by the company and the results obtained show that the resin if free of endocrine disruptor activity, and thus has been approved for its use in food and beverage contact applications by regulatory bodies across the globe. After curing with triethylenetetramine (TETA), CBDO-based epoxy showed similar physical properties such as glass transition temperature and thermal stability. Also, it required relatively less solvent to achieve the same application viscosities used in the coating industry. Reduced solvent usage will, therefore, reduce manufacturing costs and the associated health hazards to workers. Thus, CBDO-based epoxy may, therefore, represent as a favorable alternative for BPA-based epoxy resin and provide access to a very large market. Pleasing consumers is of high priority, thus, there are growing R&D investments by major paint companies such as Valspar, PPG Industries, Inc, Akzo Nobel N.V, and other chemical companies such as Eastman and Dow. Furthermore, other resin such as polyester and polyurethane resin both cures very hard and are relatively cheaper than epoxy resin which further offers a suitable alternative to epoxy resin in coatings and composites applications. Also, there are various blends of polyester and acrylic, polyester and urethanes, and even acrylic, polyesters, and vinyl which are effective resin when compared to epoxy and have superior adhesion strength.

Thus, the easy availability of substitutes of epoxy resin is expected to pose a major challenge to the global epoxy resin market in the coming years.