Demand for flame retardants in the US is expected to grow 4.6 percent per year to 938 million pounds in 2016, a significant rebound as the industry benefits from an improving economy and a turnaround in key markets like building construction and motor vehicles. Construction related applications will provide the biggest impetus to growth and continue to account for the greatest share of sales. Other factors increasing demand include stringent fire codes and flammability requirements. Environmental issues will present mixed results, with concern over the potentially deleterious health effects of halogenated flame retardants slowing growth for those compounds, especially in consumer goods, but also offering opportunities for safer alternatives.
The mortgage crisis and ensuing economic downturn resulted in a decline in flame retardant demand beginning in 2007 as a glut in the housing market led to a sharp downturn in residential construction. By 2009 the recession began to impact the construction of offices and commercial spaces. These trends reduced the need for flame retardants used mostly in construction, with boron (used in insulation) and chlorinated compounds (used in PVC) seeing the steepest declines. Markets closely associated with construction, such as wire and cable, upholstery, carpets and rugs, and other home furnishings, experienced similar losses. Outside the construction industry, flame retardant demand in motor vehicles and electronics also felt the severity of the recession.
With the housing market bottoming out and showing signs of recovery, demand for flame retardants will also begin to improve. Flame retardants utilized in construction applications will see the sharpest improvements given that insulation, roofing, flooring, building boards, and other structural materials that all require treatment. Boron and phosphorusbased flame retardants will expand at the fastest rates. Brominated compounds will benefit from use in polystyrene and polyurethane insulation.
Outside of the construction market, a number of other uses for flame retardants will experience improved market prospects, including construction associated industries like carpeting, curtains, and other home furnishings. Wire and cable applications for both communications and power transmission will expand, along with new construction. Use in motor vehicle applications will post strong improvement along with the rebound in US motor vehicle output. The increasing use of plastics in vehicles provides additional opportunities. In contrast, the outlook for the US electronics industry is less benign and electronics applications will be the slowest growing outlets for flame retardant demand.
Alumina trihydrate is by far the most important type of flame retardant used in the US market in volume terms, with 46 percent of total volume sales. However, the higher-value brominated flame retardants account for the greatest share of market value. Halogenated types will register subpar advances due to health and safety concerns, although this same issue will provide opportunities for a number of non-halogenated alternatives.
This upcoming Freedonia industry study, Flame Retardants, presents historical demand data for the years 2001, 2006 and 2011, and forecasts for 2016 and 2021 by flame retardant material, market, and product. The study also considers key market environment factors, assesses the industry structure, evaluates company market share, and profiles 36 industry competitors.
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