Epoxy resins are reactive polymers and prepolymers that contain groups of epoxides and react with a variety of amines, thiols, acids, alcohols, and phenols or with themselves directly in the presence of catalysts. The characteristics of epoxy resins vary based on additives, fillers, and plasticizers used in the manufacturing process, also known as formulating of the epoxy resins. In general, epoxy resins are superior to other resins because of its properties such as having low shrinkage, excellent chemical resistance, suitable moisture resistance, electrical insulation, impact resistance and having a long shelf life. Due to the nature as a resin, epoxy resin properties extend to molded parts that are made from it.
There are a wide variety of applications of epoxy resins, including adhesives, coatings, varnishes, binding material in cement, fiber reinforcement, fiber-reinforced plastics, foams, electrical components and for solidifying surfaces for oil drilling. They are also used for artistic projects like home décor or jewelry production. For instance, kids like to create things like Resin tumbler or small objects for fun. Based on the additives used, the properties of the epoxy resin can change, further enhancing its applications. For example, combining silver with epoxy resin results in a material that supports electrical conduction, in contrast to typical epoxy resins which have electricity insulating traits.
Growth Of The Epoxy Resin Industry Over The Past Years
The global demand from the epoxy resin industry has been growing at a steady compound annual growth rate (CAGR) of 5 percent since 2018 and is expected to maintain the growth rate until 2022. The operating rate of epoxy resin producers is expected to reach 95 percent by 2022. The overall demand for epoxy resins is expected to reach 3.45 million metric tons (MMT) by 2021.
- At a regional level, Asia accounts for approximately 65 percent of the global consumption of epoxy resin, with China as the major consumer. Asia is also the largest producer of epoxy resin with more than 75 percent of the surplus capacity concentrated in the Asia region. Asia has been serving as an exporter of epoxy resins to North America and Europe, when required due to price arbitrage, however, all three regions have become self-sufficient manufacturers of epoxy resins in recent years. As imports of epoxy resin to the U.S. have decreased, Asia is moving towards reducing exports and focusing on local demand. Supplier power is medium in North America and Europe and low in Asia while buyer power is medium in North America, Europe, and Asia.
- The versatile and highly customizable nature of epoxy resins facilitates their use by a variety of industries, however, the demand for epoxy resins at a global level is driven by the electronics, construction and automotive sectors. The demand for electronics is the single largest end-user segment, driven by increasing disposable incomes and the presence of new consumer electronics in the market. In electrical systems, epoxy resins play an important role in protecting integrated circuits from physical shock, heat, dust, light, and moisture. As epoxy resins are effective electrical insulators, they protect the electrical parts from short circuits. Epoxy resins are used for paint, coatings, and adhesives in the construction industry and accordingly the demand is greater in developing nations like India, China, and LATAM, where the infrastructure is still undergoing rapid changes. The demand for epoxy resin in Asia is driven by the growth of the construction, electronics, and automobile sectors while the demand in North America and Europe is from aerospace, electronics, marine coatings, and windmills.
- Top global suppliers of epoxy resin are Kukdo, Nan Ya, Sanmu Group, Hexion, and Chang Chun. Popular engagement models for sale of epoxy resins in North America and Europe are spot and contract formats, while the spot engagement model is most popular in Asia. Buyers procuring low volumes of epoxy resins also generally prefer spot buying. The typical contract period in the epoxy resin market is for 2-3 years periods with quarterly price revisions. As operating rates for epoxy manufacturing are expected to increase but no further capacity additions have been announced, the market is likely to shift the supplier is likely to have greater negotiation power over buyers.
- The epoxy resin market, despite offering immense flexibility and customization ability, also faces certain challenges. Primarily, the fluctuating prices of raw materials used to produce epoxy resins pose a challenge to the growth of the market. Raw materials such as BPA have been associated with increased risk of health issues for people regularly handling the material. Another challenge has emerged in the form of competition from epoxy resin alternatives, especially the bio-based epoxy resins that are made from natural sources and are healthier both for people and the environment. The manufacturing of epoxy resins is also subject to local environmental regulations, such as the EU’s REACH (Registration, Evaluation, Authorisation, and Restriction of Chemicals) guidelines for production and use of chemicals.
Epoxy resins are of immense use across industries and with the use of additives and fillers, the properties of epoxy resins can further be enhanced to suit the desired requirements. There is ample supply of epoxy resin, sufficient to meet the growing demand. While Asia leads in terms of consumption of epoxy resins, it is also the largest producer.