Despite the environmental concerns surrounding
halogens, 2000 was an
exceptional year for the brominated flame-retardant industry, as all major
suppliers posted sound financial results. However, 2001 does not look as
bright, and companies are expected to find it much more difficult to
replicate the growth rates seen last year.
According to the
bromine Science and Environmental Forum (
BSEF), the
brominated flame-retardant industry had an estimated global value of $860
million. The total market demand by region is shown in the figure attached.
The demand for all types of
flame retardants is forecast to grow more than
4 percent a year to 2003 in the United States alone.
Major Market Participants Have an Impressive Year 2000
Albemarle Corporation,
Great Lakes Chemical Corporation, and Dead Sea
Bromine Group are the three major brominated flame-retardant producers, and
they all have announced significant
sales growth over 2000.
Dead Sea Bromine, the world's largest supplier of elemental
bromine, has
seen outstanding sales growth, driven by a booming market for PCs,
electronics, and communications devices, for which brominated flame
retardants are still the first choice.
Similarly,
Great Lakes Chemical, the world's largest manufacturer of
brominated
flame retardants, saw
polymer additives sales grow by 9 percent,
which it credited to increased shipments of flame retardants. As a
matter
of fact, sales were so strong that the company employed major price hikes
during 2000, citing higher raw material costs, increased demand for their
products, and the resulting need to expand
production-lines/order_t/'>production lines.
Finally, Albemarle's polymer
chemicals sector had a great year with sales
up 12 percent, and operating
earnings up 42 percent, primarily due to the
strength of its flame retardant business. The division posted
flame-retardant growth of 15 percent over 2000.
Albemarle is the second
largest global brominated flame-retardant producer behind Great Lakes
chemicals.
Price Hikes Help Maintain Good Performance
price increases were the main reason behind the good financial results of
the industry. These increases may indicate that the brominated
flame-retardant market is getting stronger. However, there was some
over-capacity in the past, and prices were much depressed at the beginning
of the year. This is now starting to change. As global market demand
continues to grow at higher than anticipated levels, the need for pricing
that will support capacity re-investment has become more urgent.
For example, Great Lakes announced
price increases virtually every other
month throughout 2000. The price hikes included brominated flame retardant
chemicals,
phosphorus-based flame-retardant chemicals,
phosphate ester
retardants, and
antimony trioxides.
Albemarle kicked off 2000 with 5 percent price increase in several
brominated flame-retardant products in January. In October, the company
ordered additional increases for more than a dozen products.
The Dead Sea Bromine Group announced price rises in February and October,
citing raw material and energy costs increases as the main reasons.
It is worthwhile to note that both Great Lakes and Albemarle say the price
hikes on brominated flame retardants was for the purpose of increasing
production capacity, though higher raw material and energy costs were also
important factors.
The Year Ahead
Despite the impressive results shown in 2000, the brominated
flame-retardant market began to have some difficulties at the end of the
year. The slowing economy, higher energy costs and severe weather-related
problems negatively impacted sales in the fourth quarter.
While Albemarle Corporation posted flame-retardant growth of 15 percent
over 2000, volumes grew a modest 5 to 6 percent in the fourth quarter.
Similarly, Great Lakes Chemical's
polymer additives division had a poor
fourth quarter, with sales dropping 8 percent from the previous year.