Plastics Market Extends Bright Outlook for Filler Minerals

LONDON, October 25, 2016 /PRNewswire/ --

As the plastics and rubbers world gathers in Dusseldorf this week for the K 2016 trade fair, Roskill highlights some key minerals used in the sector and their trends  

A wide variety of minerals are used in the production of plastics and rubbers in the role of fillers and extenders. The application of these minerals improves a number of properties in the final product, such as opacity, brightness, hardness, and resistance to abrasion, but can also reduce production costs by substituting for more costly materials. There is an enormous array of minerals used in the filler market but some of the most important, by volume, are calcium carbonates (ground and precipitated), kaolin, talc, titanium dioxide, feldspar, and aluminium trihydrate. These are supported by a host of other lesser used but essential minerals such as wollastonite, mica, gypsum, barytes and zinc oxide.

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Perhaps the most widely used filler mineral today is calcium carbonate , ground grades of which are sourced from crushing and grinding a carbonate rock (typically limestone, chalk or marble), and precipitated grades of which are made from calcium feedstocks via various routes including the carbonate, lime-soda, and Solvay methods.

The paper and plastics industries are the largest markets for filler-grade calcium carbonate, accounting for around 39% and 27% respectively of global consumption in 2015. Filler-grade calcium carbonate use has become increasingly concentrated in China where paper, plastics and paint markets are the largest of any country.

Growth in consumption in paper has slowed to its lowest level for two decades as increases in Asian production have been offset by declines elsewhere. The China Paper-Making Industry Association has reported a clear trend towards greater use of calcium carbonate at the expense of kaolin or other filler minerals.

In plastics, filler grades are mainly used in rigid PVC, for which the major market is in construction. Construction is also closely related to the paint sector, as the main market for paint is in architectural coatings - particularly residential. GCC is more commonly used than PCC because of its lower price and greater availability, with the exception of China.

The two other major end uses are rubber and adhesives/sealants, production of which is concentrated in Asia. Most calcium carbonate is used in synthetic rubbers (primarily those made from styrene-butadiene rubber) for non-automotive markets, such as footwear, latex and domestic mouldings.

Global calcium carbonate production capacity is estimated to exceed 115Mtpy, divided between GCC (>92Mtpy) and PCC (>23Mtpy). This also includes at least 5Mtpy of undifferentiated capacity located mostly in China. GCC capacity is highest in China, followed by the USA, Spain, and Norway. Around 60% of PCC capacity is sited in China with another 12% in the USA. A high proportion of PCC capacity is located at satellite plants supplying paper mills.

On the supply side, around half of global capacity is controlled by twelve companies. The three leading producers - Omya, Imerys and MTI - together account for more than 40% of GCC capacity and over 35% of PCC capacity. As has been witnessed in other commodities, the Chinese calcium carbonate industry is undergoing rationalisation to raise productivity and reduce pollution. Producers are seeking to supply ever brighter grades, which have higher production costs but can often reduce the amount of material required. However, achieving such grades means a high investment in processing equipment and use of higher purity raw materials.

Talc 

The global talc market has seen some interesting changes in the pattern of demand and production in recent years. Growth in demand for talc-filled polypropylene (PP) in vehicles means plastics could replace paper as the leading talc market within the next couple of years. Paper remained the largest market in 2013 at just under a third of the total, but saw its market share drop by 5 percentage points from 2010. As discussed above, Asian papermakers have followed trends seen in North America and Europe over the past 30 years and switched from talc to granular and precipitated calcium carbonate in paper-filling markets.

The decline in the paper market has been more than offset by increasing demand for talc in PP production. Between 2010 and 2013, talc use in this market is estimated to have risen from just over 20% of the market to nearly 30% of total consumption. This is a result of higher automobile production and increased use of PP in vehicles in order to reduce weight, fuel consumption and CO₂ emissions. The intensity of talc use in PP has also increased as talc imparts the strength, stiffness and other mechanical properties needed to meet lightweighting requirements. The average talc content of a light automobile manufactured in the EU more than doubled from 4.9kg in 2006 to 10kg in 2014.

China continues to dominate the world talc supply, with exports of 625,000t in 2015. Four leading producers, each with capacity of more than 300,000tpy - Aihai Talc, Beihai Industrial, Guangxi Longsheng Huamei and Mianning Xicheng Talc - together represent some 35% of capacity. China's dominance is facing greater competition, however, as output of crude talcs from Afghanistan, India, North Korea and Pakistan ramps up.

Growth in talc production has been led by Afghanistan, where the formation of the Talc Association under the USAID programme in 2010 and investment by private mining companies in subsequent years have led to a substantial increase in talc output. Trade statistics are not reported by Afghanistan, but it is thought most of the country's talc output is exported to Peshawar in Pakistan for sorting and grinding prior to export. Pakistan also suppresses trade data, but inferred exports indicate that Afghan talc production may have increased from 10,000tpy prior to 2008 to more than 300,000tpy in 2015.

Aluminium trihydrate 

Speciality aluminium trihydrate (ATH) can be used in various filler applications such as paper and board, adhesives, sealants, paints and coatings, and also in plastics, which together account for around 125,000t of the total ATH market. ATH is a speciality filler and commands higher prices than other white minerals such as calcium carbonate, talc and kaolin. It typically finds application as a niche additive where its high price is outweighed by the superior properties it provides.

In plastics, the main markets for ATH are in thermoplastic polyesters (TPE), especially polyethylene terephthalate (PET) for fibre and soft drink bottles, and the moulding compound polybutylene terephthalate (PBT) that is used as an engineering resin. ATH loading levels vary between 9-50% in PVC wire and cable and can reach as high as 60% in cast acrylic/PE baths.

In the paper market, the conversion from acid to alkaline manufacture, which depressed consumption of ATH in the 1990s, is essentially thought to be complete although some paper mills continue to use this process. However, as a filler the use of ATH in paper manufacture has benefitted in recent years from higher demand for high quality paper with improved optical properties. Other factors include a trend towards faster machine speeds and the use of lighter weight paper.

ATH can also be used in synthetic marble because of its extremely high purity and whiteness as an extender for titanium dioxide and also to some degree as a flame retardant. Indeed, ATH's role as a flame retardant is significant (accounting for 800,000t in 2015) and although it is not technically included under the fillers segment, in this market it provides a dual role as a flame retardant and as a filler.

ATH is the major mineral primary flame retardant in use today and dominates this sector of the market, owing to its relatively low cost compared to its main rival - synthetic magnesium hydroxide. Plastics and rubber applications that use ATH as a flame retardant include thermosets (polyester resin, epoxy resins, phenolic resins, and polyurethane), thermoplastics (PE, PP, PE-copolymers, and PVC) and elastomers (EPDM/EPM, EVA, SBR, BR, IIR, XL-PE, EEA, EMA, silicone rubber and latex). The largest uses are PE, PP and PET, all of which are forecast to grow in excess of 4%py over the next five years.

There are relatively few producers of speciality ATH worldwide. The main producers of grades suitable for filler/extender and flame retardant applications are Alcoa World Alumina Minerals, Almatis, Alteo, Chalco, Huber (including through its subsidiary Martinswerk), Nabaltec, Nippon Light Metals, Showa Denko, Sumitomo Chemicals and TOR Minerals.

Titanium dioxide 

Plastics is a key market for titanium dioxide (TiO₂) pigment, accounting for 26% of global demand in 2016 or some 1.5Mt of pigment. Many plastic products are intrinsically colourless, but for some the resin is opacified and coloured for practical or aesthetic reasons. Rutile pigments are widely preferred and they usually need coating to protect the resin from UV degradation by silica or silanes.

The plastics industry is a growing market for TiO₂, which is the leading white pigment used. Plastics continue to displace other materials such as wood, metals, glass, board, leather and textiles in a wide variety of applications, and in all countries per capita consumption of plastics is rising faster than per capita GDP. This translates into a growing demand for titanium dioxide pigment in the sector, and by 2025 Roskill forecasts that the plastics industry will account for nearly 30% of consumption.

This new demand will be matched by supply. Over the last 10 years there have been significant capacity expansions, particularly in China, and a series of mergers and acquisitions and latterly rationalisation elsewhere in the world in the form of plant closures. One of the leading Chinese TiO₂ producers, Henan Billions, announced in September 2016 that it would acquire Sichuan Lomon Titanium Industry for US$1.34Bn - making the combined company the fourth largest producer globally. Other leading TiO₂ producers are Chemours (formerly DuPont), Huntsman, Cristal, Kronos, and Tronox.

By 2015 China effectively accounted for 40% of the world's TiO₂ pigment capacity. Still there are several medium-sized and large-sized Chinese pigment producers aiming to install new chloride-route plants, some with the aim of replacing existing sulphate-route capacity. In total, these net changes and other new technology plants will bring about an increase in world capacity. Over the next decade, the changes in individual plant capacities will contribute towards structural changes in the industry, in terms of geographic location, process technology and company ownership of market share.

Roskill Information Services publishes a range of market outlook reports focused on filler minerals, including Ground and Precipitated Calcium Carbonate, Titanium Minerals, Talc, Non-Metallurgical Bauxite and Alumina, Kaolin and Flame Retardants.  

Web: http://www.roskill.com   

SOURCE Roskill Information Services