Phenolic Resins Market Size, Share & Trends Analysis Report By Product (Novolac, Resol), By Application (Wood Adhesives, Molding, Insulation, Laminates, Paper Impregnation, Coatings), And Segment Forecasts, 2020 - 2025

Industry Insights

The global phenolic resins market size was valued at USD 11.74 billion in 2019 and is anticipated to grow at a compound annual growth rate (CAGR) of 5.4% from 2020 to 2025. In the transportation sector, there is a rise in demand for rubber and friction materials which has generated interest in durable phenolic compounds and lightweight, which is driving the growth.

The development of a heat shield for the SpaceX’s Dragon Capsule, which is a Phenolic Impregnated Carbon Ablator (PICA), is one of the most momentous technological innovations in the industry. It enables to reuse of capsules for future missions because, the raw material allows to return of cargo, crew, and the spacecraft to Earth safely, despite the high temperatures.

The market in the U.S. promises exceptional growth avenues due to the presence of highly developed industries, application technologies, and advanced processing, which is leading to an acceleration in R&D initiatives and compelling new product launches. U.S. is home to many automotive manufacturers who are heavily inclined towards new domestic cost advantages by shifting the production facilities to the U.S. from other developed economies.

The recovery of the automotive market in the U.S. and the upsurge in the sales of passenger cars have increased the consumption of novolac resins. The manufacturers completely rely on composites that are lighter in weight and bonding agents to witness the strict emission guidelines. Novolac resins are extensively used in abrasives, adhesives, carbon binder,s, and insulation, which is boosting its demand in the end-use industries.

Domestic manufacturing of wall panels, cabinets, and furniture is witnessing growth owing to the rise in residential housing that utilizes engineered wood products. The economic recovery in the U.S. is expected to put forth lucrative opportunities for these laminates. Additionally, phenolic resins are extensively used to produce industrial and decorative laminates for the construction industry.

The prices for phenolic resins have been under downward pressure because of the oversupply from emerging nations such as China, which is limiting the progress of the market in recent years. However, phenolic resins help in reducing the weight of the vehicles, and this leads to control in the emission of CO2, which further accelerates the demand for phenolic resins in foams and other car products.

Phenolic Resins Market Trends

Increasing trend to substitute base material phenol with natural alternatives such as lignin is a significant factor driving industry growth in the phenolic resin industry. Furthermore, product and application innovation in impregnated materials is likely to present lucrative opportunities for phenolic market over the forecast period.

Economic recovery in the U.S., coupled with an exponential increase in the housing construction sector, is a major factor driving phenolic resins demand. Decorative phenolic laminates are quickly gaining popularity in the Asian construction sector, specifically for residential & commercial applications. The upsurge in construction activities owing to a burgeoning population, coupled with a significant increase in consumer disposable income in this country, is another major driving factor for this industry.

Urbanization rates have also increased in this emerging economy with a simultaneous transition in consumer lifestyles and with citizens actively seeking more luxurious lifestyles, which has fostered product demand in automotive, electronics, and consumer goods industries.

Anti-corrosive properties, coupled with high heat resistance, and safety of these products are other major driving factors for high demand in several industrial applications. The market is likely to benefit from governmental schemes promoting manufacturing and construction activities in Asian economies. However, even developed economies are expected to benefit from shale gas discoveries in the U.S., which has lowered crude oil prices in recent months. This in turn has lowered overall feedstock prices for several industrial chemicals such as phenols as well.

Phenols are the basic raw materials used to produce phenolic resins, while phenols themselves are derived from chemical building blocks including benzene, toluene and other chemicals. The prices for these chemicals are all ultimately dependent upon crude oil supply & price trends across the globe.

Application Insights

Based on the application, the phenolic resins market is split into wood adhesives, molding, insulation, paper impregnation, laminates, and others. Wood adhesives application exhibit exceptional water resistance, water diluting ability, excellent moisture resistance, and weather resistance, which is creating a hype of wood adhesives in various end-use industries. Owing to the rise in disposable income, the Asia Pacific is expected to be the largest market for wood adhesives.

Furthermore, the molding components are utilized extensively in numerous end-user industries such as household applications, automotive commutators, and electrical & electronics. Owing to the excellent dimensional stability, the compounds find applications in manufacturing electrical equipment and kitchen-ware, which will further increase the demand for molding resins in near future.

The molding resins segment is considered to be one of the fastest-growing applications because of the rapidly growing petrochemical industry in China, which is accelerating the demand for molding in the markets of the Asia Pacific region. Along with this, the market is experiencing bulk trading and production of petrochemical derivatives due to low crude prices, which in turn will foster the growth of the market in the forthcoming years.

In addition to this, many prominent companies operating in the phenolic resins industry have started adopting various strategies to sustain the annual growth and minimize the impact of lowered oil prices on profit margins. This trend is expected to boost the performance of phenolic resins and will also propel the demand for numerous molding activities in the coming years.

Product Insights

The market is bifurcated into novolac and resole. Resoles have been further bifurcated into solid and liquid resins. Novolac resins led with 49.95% of the market volume and are expected to witness heavy demand owing to superior properties of the product such as solvent resistance, hardness, and heat. The escalation in the electrical and electronic industry in the countries in North America is also driving growth.

Furthermore, resole resins are anticipated to emerge as the fastest-growing product with a CAGR of around 4.2% over the forecast period. The developing economies such as the Asia Pacific are spending massively on construction, which is expected to drive the growth of the market during the forecast timeframe.

Additionally, repair and remodeling activities are gaining traction and are lifting the consumption of resole resins in the construction industry in developed regions. The innovative products that are implemented with newly discovered properties are likely to meet the transitioning consumer requirements, which will gather pace and boost the growth of the market.

The inherent nature of phenolic resins helps in providing an impermeable shield to protect numerous substrates from the corrosive effects of chemicals. Additionally, other phenolic resins consist of cyanate ester resins, modified resins, benzoxazine resins, and spray-dried resins, which are majorly used in structural composites and printed wiring boards, which will hype the demand and growth of the market.

Regional Insights

Geographically, Asia Pacific is expected to expand at the fastest CAGR of over 4.4% during the forecast period owing to the rapid expansion of end-use industries such as consumer goods, automotive, construction, and aerospace. Additionally, this region is anticipated to foresee the development of bio-based feedstock for the production of phenolic resins, which is expected to boost the dynamics of this industry in near future.

Asia Pacific dominated the Phenolic Resins market and accounted for the largest revenue share of 34.6% in 2018. The expansion of the furniture and consumer goods industry, along with growing construction spending in Asia Pacific are expected to drive product demand over the forecast period.

The expanding automotive sector in Asia Pacific is also likely to present numerous opportunities for Novolac producers and suppliers. These resins are increasingly being utilized in automotive panels, foams, bonding agents and other components to foster weight & fuel savings in the industry. Passenger car sales are also on the rise, owing to rise in population and growing disposable income, which has also fostered phenolics growth in vehicle assembly operations & aftermarket.

Developed economies such as Europe and North America are also likely to witness a revival in the production levels of automobiles, which will foster the demand for phenolic resins in numerous applications such as abrasives, adhesives, coatings, and insulation. Along with this, the key participants and increasing the R&D expenditure, which is anticipated to drive the growth of the market in the forthcoming years.

The North American phenolic resins market consists of three major countries, namely the U.S. and Canada. The U.S. dominated the regional market owing to high demand for phenolic resins from several major end-use industries such as construction, automotive and electrical & electronics. Further, open investment policy, highly skilled workforce, advanced infrastructure, and government incentives promoting manufacturing activities also encouraged phenolic resins growth in the U.S.

Wide-ranging R&D initiatives are also being raised and undertaken in the MEA market, which has made this region the fastest-growing to meet the burgeoning domestic needs that will lead to a positive impact on the market. Additionally, technological innovations and a rise in the disposable income of the consumers will also be responsible for the market’s growth shortly.

The electronics industry in Middle East & Africa is anticipated to witness steady growth rate over the forecast period owing to increasing disposable income of consumers in urban areas in GCC, growing internet penetration and proliferation of connected devices, which in turn is leading to rising consumers’ preference towards online retail in these region.

In recent days, Latin America has also experienced better political stability, which has led to a sound economy for investments and is expected to remain the fastest-growing region over the forecast period. The countries of this region are investing in various developed sectors such as consumer electronics and construction to meet the export demand. Phenolic resins are projected to benefit from all the dynamics, along with the availability of low-cost technologies and labor.

Key Companies & Market Share Insights

The market consists of major key players who are inclined towards identifying raw materials derived from natural products or byproducts and are majorly resulting from biomass feedstock. These companies are investing huge amounts in R&D activities and innovations to gain traction and to create lucrative growth opportunities during the forecast period.

The key participants operating in the market are Owens Corning; Arclin Inc.; Olympic Panel Products LLC; Ashland Inc.; DIC Corporation; Hexcel Corp.; Arizona Chemical Company LLC; Georgia Pacific Chemicals; Kolon Industries Inc.; Momentive Specialty Chemicals; Sumitomo Bakelite Co. Ltd.; BASF SE; Hitachi Chemical Co. Ltd.; and SI Group Inc.

BASF SE has recently modernized and enlarged its production plant in Korea which will boost the production capacity of phenolic resins to nearly double the existing amount in Ludwigshafen. Other companies are also looking forward to expanding their reach to various developed economies which will help the industry to grow massively during the forecast period.

Phenolic Resins Market Report Scope

Global Phenolic Resins Market Segmentation

This report forecasts revenue growth at global, regional, and country-level and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For this study, Grand View Research has segmented the global phenolic resins market report based on product, application, and region:

• Product Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)

  • Novolac

  • Resol

    • Liquid Resol

    • Solid Resol

  • Others

• Application Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)

  • Wood Adhesives

  • Molding

  • Insulation

  • Laminates

  • Paper Impregnation

  • Coatings

  • Others

• Regional Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)

  • North America

    • The U.S.

    • Canada

  • Europe

    • Germany

    • France

    • Italy

    • Spain

    • U.K.

    • Turkey

  • Asia Pacific

    • China

    • India

    • Japan

    • Southeast Asia

  • Latin America

    • Mexico

    • Brazil

  • Middle East & Africa