Bisphenol-A  

*Millions of pounds per year of bisphenol-A (4,4-isopropylidene diphenol, or BPA). All US producers make BPA through an acid-catalyzed condensation reaction of phenol with acetone. All companies have captive phenol and acetone supplies for BPA production and all except SUNOCO have captive BPA requirements for downstream resins.

In 1999, Bayer expanded BPA production at Bayport, Tex., to 350-million-pounds, to serve the company's polycarbonate requirements at the site.

GE uses captively all of the bisphenol-A produced at its two plants in the manufacture of polycarbonate resins and polyetherimides.

Last year, private equity firm Apollo Management acquired the epoxy resins business of Royal Dutch/Shell Group and renamed it Resolution Performance Products. This included the BPA unit in Deer Park, Tex.

Early this year, SUNOCO acquired Aristech Chemical from Mitsubishi Corp., which included the biaphenol-A business and plant in Haverhill, Ohio.

Profile last published 1/4/99; this revision, 11/5/01.

DEMAND
1999: 1,964 million pounds; 2000: 2,115 million pounds; 2004: 2,764 million pounds, projected. Demand equals production plus imports (1999: 18 million pounds; 2000: 6 million pounds) less exports (1999: 169 million pounds; 2000: 255 million pounds).

GROWTH
Historical (1995 - 2000): 6.9 percent per year; future: 7 percent per year through 2004.

PRICE
Historical (1995 - 2000): High, $0.94 per pound, list, polycarbonate grade, hopper cars, dlvd.; low, $0.94, same basis. Current: $0.94, same basis. Due to the large variation in BPA purchases, the discrepancy between list price and contract price is often quite significant. Contract price for large volume purchases is currently estimated at $0.50 to $0.55, same basis.

USES
Polycarbonate resins, 68 percent; epoxy resins, 24 percent; miscellaneous, including flame retardants (mainly tetrabromobisphenol-A), unsaturated polyester, polysulfone, polyetherimide and polyarylate resins, 8 percent.

STRENGTH
BPA consumption has more than doubled during the past decade, driven primarily by heavy demand for polycarbonate resins. Automotive applications account for about 20 percent of the total polycarbonate consumption. The resins are used in place of traditional materials such as metal and glass in automotive components. Glazing and sheet uses, such as architectural, security and transportation, make up another 20 percent of polycarbonate consumption. Optical media, including audio compact discs (CDs), CD-ROMs, recordable CDs and digital versatile disks (DVDs) are the third-largest market for polycarbonate resins, accounting for 15 to 20% of the PC market. Polycarbonate consumption for this last sector is currently growing at 14 percent per year. Collectively, polycarbonates for all application areas are growing at slightly more than 8 percent per year and represent 68 percent of BPA's end-uses.

WEAKNESS
Epoxy resins, which account for 24 percent of BPA's end-uses, reflect GPD growth. The average annual GDP for the past four quarters is 1.2 percent, and epoxy resins should mirror this, now, and for the short-term future. BPA has for years, been targeted by environmental groups, which oppose its use in food packaging and other products. A report issued last May by the National Toxicology Program (NTP; Research Triangle Park, NC), a division of the National Institutes of Health (Bethesda, MD), said there is "credible evidence" that possible endocrine disrupters, including BPA, cause human health effects at doses lower than those determined safe by EPA. The report stops short of concluding whether these effects are harmful, however, and NTP says more research is needed. Industry groups, including the American Plastics Council and The American Chemistry council cite other studies showing contrary results. This controversy has no end in sight and will undoubtedly dampen BPA’s use in certain consumer products.

OUTLOOK
BPA's growth prospects remain bright, based on the high growth expected for CDs (14 percent) during the next few years and the emergence of new markets, such as polycarbonates for auto glazing to lighten vehicles. Epoxies are projected to grow at a more modest 1 percent annual rate. In the consumer product area, the controversy over BPA leaching will diminish polycarbonate use, and hence diminish BPA’s use, in such emotionally sensitive products as baby bottles. Overall, BPA is projected to grow at 7 percent annually, at least through 2004.