Raw materials for the adhesives industry: Trends and challenges
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Increasing EU and national regulation
A challenge the European chemical industry has been managing for years is the steadily increasing number of E.U. and national regulations (e.g. REACH) which restrict the use of specific chemicals and define more stringent requirements to protect the workforce exposed to chemicals and end users. Without doubt, these regulations have stipulated product innovations where the raw material industry has developed new products to meet present day requirements, and they will continue to do so in the future.
Conversely, this regulation flood, which is becoming more and more complex, results in an increased workload and burden for the collective industry. Organisations such as FEICA, the European Adhesive and Sealant Industry Association, will play a bigger role in the future to support the industry to manage said challenges. One example is the “Guidance for a food contact status declaration for adhesives” which helps all participants in the value chain to fulfil the legal requirements of the E.U. Food Contact Regulation.
Changing global feedstock for raw materials
A trend which is virtually invisible to the adhesive industry and end-consumers is the slow change of global feedstock for basic chemicals needed in the production of adhesives raw materials. This trend could have a major impact on the long-term availability and price level of raw materials for the European adhesives market.
It originally started with the fracking gas boom in the U.S. a number of years ago and will not be impacted by the falling price of crude oil. The American fracking boom has increased the availability of lower-cost natural gas. Due to this reduced price, U.S. gas crackers have a commercial advantage over the naphtha-based crackers located in Europe and Asia, and they can even compete with the light-feed crackers in the Middle East.
The issue is that the product portfolio of the gas and light-feed crackers differs significantly from those based on naphtha crackers, resulting in (regional) shortages of some raw materials for the adhesives industry. Whilst the U.S. and Middle East continue to invest in new crackers, a couple of old European naphtha-based crackers have been shut down in recent years without compensation through major reinvestments.
Significantly lower feedstock costs in the U.S. have led to major regional price differences for important base chemicals such as ethylene. Additionally, the price of crude oil no longer correlates with that of raw materials and end products. One reason for this is the multitude of processing steps along the value chain that determine the end price to a far greater extent than the crude oil price does.
What are the consequences for Europe?
The EU has started to import base chemicals from regions like the U.S. and Middle East due to lower production and feedstock costs. It is an advantage for the industry, but it will increase the dependency of the European chemicals industry on these regions in the future. Furthermore, Europe will rely more on imports of those basic materials which cannot be produced in sufficient quantities solely by naphtha-based crackers based in Europe.
The long-term impact of coal being more frequently used in China as feedstock for basic chemicals cannot be predicted at present. With our attention directed towards renewable resources, as long as fracking provides a cheap feedstock for basic chemicals, renewable raw materials will not play a major role for the foreseeable future simply due to commercial reasons. The bioethanol boom seems to be over!
The chemicals and adhesives industries must watch this trend carefully and formulate strategies which ensure long-term supply security of key materials needed for adhesives. These trends can and will stipulate product innovations. The European industry has to focus on its strength, “the power of innovation”.
About Dr. Bernard Momper
Dr. Bernhard Momper is currently R&D and application technology manager for emulsions at Celanese. He started his professional career at Hoechst as a research chemist and held various technical positions with increasing responsibility at Hoechst and Clariant prior to joining Celanese in 2002. At IVK, the German Adhesives Association, Dr. Momper is also head of the raw materials working group and member of the board.
Questions and comments?
Dr. Bernhard Momper
Manager R&D/Application Technology, Emulsions Polymers
Brüningstr. 50, Gebäude / Building G 832
65926 Frankfurt am Main
Postal address: 65843 Sulzbach (Taunus)
+49 (0) 172 6750344