April 6, 2011
Petroleum resin are rather new type of polymer materials, which has a bearing on many industries and sectors, suc h as repair and finishing activities, paints, papermaking, and tire and rubber business. The chemistry of petroleum resins, and the range of commercially available variations allow a very broad range of properties. Due to excellent adhesion, heat and chemical resistance, and good-to-excellent mechanical properties, petroleum resin have been among the most preferred resin material for paints and coatings, printing inks, adhesives, and compounding agents. In paint industry, petroleum resin lotion is used for strengthening synthetic coating material while light colored petroleum resin are used to produce laquer for enhancing adherence and gloss. In the rubber industry, petroleum resin with high softening point are used to enhance the hardness of synthetic rubber while petroleum resin with low softening point are used as plasticizer. Petroleum resin are also used in traffic sign coatings, printing ink, hot melt glues, and as water repellency agent for paper. In recent years, petroleum resin market has witnessed an expansion into other markets, such as oil field water treatment agent, pitch modified agent, and slurry additive.
In this economic cycle, worldwide demand for petroleum resins has shrunk greatly, primarily due to downstream industries such as the paints and coatings, rubber, and printing ink, all of which suffered from depression and weak market demand. The sharp decline in global economic activity, raw materials price volatility, liquidity concerns, and widespread nationalizations exerted pressure on the petroleum resin industry. Fall in the business confidence index triggered by falling profits, liquidity constraints, and shortages of credit availability to finance investments in new machinery/plants and upgrades, represented common woes that halved investment plans across all end-use sectors, thereby reducing the demand for petroleum resin. Hard-pressed by the falling demand during the recessionary period, majority of petroleum resin manufacturers idled factories and cut production rather than compete on price. Although the global financial downturn did not have as big an effect on developing nations such as China as it did on developed nations, petroleum resin manufacturers struggled with the combination of declining profit margins and lower commodity prices. In 2011, inventories remain low and supplies tight. Unplanned outages have started to impact the downstream supply chain resulting in price volatility.
As stated by the new market research report, United States and Europe accounts for a major share of the global petroleum resin market. Replenishing of depleting inventories in the supply chain as a result of resurging production activities on wings of improving end-user demand will help perk up demand for petroleum resins. The sheer diversity of application areas for petroleum resins provides a quick and easy road for recovery. Improving economic conditions will unleash pent-up demand as hitherto postponed purchase decisions resurge to provide enhanced commercial opportunities. A strong increase in new investment plans would boost domestic demand for petroleum resins while improving external demand following world economic recovery would encourage petroleum resins exports. Stimulus packages offered by governments across the globe to infuse vigor in manufacturing activity across the globe will also help drive demand for petroleum resins in the short term. In post recession years, petroleum resins demand will return to growth, but this is expected to be moderated due to strong consumer demand for plant-based and biodegradable products, and a regulatory framework that favors alternatives such as bio-plastics over petroleum resins.