PHENOLIC RESINS MARKET ANALYSIS

Phenolic Resins Market Size and Trends

The phenolic resins market is estimated to be valued at USD 13.31 Bn in 2024 and is expected to reach USD 18 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 4.4% from 2024 to 2031.

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Phenolic resins are used across a variety of applications such as laminates, molding compounds, chemical intermediates and adhesives. The market is expected to witness steady growth on account of increasing demand from the building and construction industry. Phenolic resins offer advantages such as heat resistance, dimensional stability, and fire resistance which makes them a preferred choice for various construction applications including roofing, flooring, insulation, and wall paneling. Growing construction activities in Asia Pacific and Middle East Africa region is likely to drive the demand for phenolic resins during the forecast period.

Expanding application scope

The applications of phenolic resins have been expanding significantly over the past decade leading to rising demand. Earlier, these resins were primarily used in the wood adhesives applications, however, with advancements in material properties supported by ongoing research and development activities, their use is extending to other areas as well. The excellent heat resistance, dimensional stability and electrical properties of phenolic resins have opened up opportunities in applications such as molding compounds, friction materials, abrasion-resistant laminates and coatings. Manufacturers have been increasingly using phenolic resins for their molding compounds in various industrial and electrical applications. The high strength and ability to withstand temperatures up to 150°C without losing properties makes phenolic resins suitable for electrical insulators and switchgear components. Also, the commendable balances of mechanical, thermal and electrical properties along with flame retardancy has boosted their acceptability in power tool components and housings of various industrial equipment. The rising demand for such industrial goods will keep driving the growth of phenolic resins market.

Market Concentration and Competitive Landscape

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The transportation industry has emerged as a major end-use industry for phenolic resins with extensive applications in automotive as well as aerospace and marine sectors. Phenolic composites which provide advantages of low density, corrosion resistance and mechanical robustness are extensively utilized in the interiors of aircrafts, helicopters, ships and passenger ferry. Ongoing innovations and introduction of light-weight flooring, ceiling, galley and lavatory components made from phenolic composites are fueling their demand from aerospace and marine industries. Moreover, in the automotive industry, strict emission regulations have induced the development and adoption of lightweight vehicles, therefore growing automotive industry is expected to drive the market growth. For instance, the automotive industry in India is the fourth-largest by production in the world as per 2022 statistics.

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The phenolic resins market faces several challenges. Strict environmental regulations regarding formaldehyde emissions pose difficulties for manufacturers. Additionally, phenol prices fluctuate wildly due to petroleum price volatility, increasing production costs unpredictably. The market also contends with strong competition from alternative materials that offer superior properties for some applications, such as epoxy and polyester resins.

 Market Opportunities: Developing economies continue rapid industrialization

Developing economies continue rapid industrialization, driving demand. Additionally, innovation has yielded lower-emission resin types, allowing the market to tap applications previously unsuitable due to emissions concerns. Ongoing research aims to enhance resin properties to further broaden applications. Growth in high-performance applications could offset weakness in commodity sectors.

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The novolac segment currently holds the 51.1% share of the phenolic resins market due to its strong bonding capabilities and resistance to heat. Novolac resins are highly durable and make excellent adhesives for uses in conditions that require high heat resistance up to 150°C. They form very hard and chemically inert thermoset polymers on curing, making them suitable for a variety of industrial applications. Novolac resins have outstanding dielectric properties and electrical insulation qualities. They are widely used to manufacture circuit boards and electrical components. Their heat resistance allows their use in automotive and aviation engine components that experience high operating temperatures on a regular basis. Novolac resins also find major usage in fire retardant laminates and molded articles due to their flame retardant nature.

Insights, By Application: Wood Adhesives leads the Application segment driven by the building and furniture industries

The wood adhesives application presently accounts for the 41.6% share of overall phenolic resins consumption. This is attributed to thriving end-use sectors like construction, furniture, and flooring. Phenolic resins offer excellent bonding properties for engineered wood products and other wood composite materials. Their outstanding heat resistance, water resistance and durability make phenolic resin adhesives suitable for use in flooring, plywood, laminated veneer lumber and other wood composites used extensively in the construction industry. Phenolic resin adhesives ensure structural integrity and long service life of wood joints, floors and furniture - qualities valued by builders, architects, and homeowners. In the booming furniture industry, phenolic resin adhesives are preferred for manufacturing high quality, long-lasting and aesthetically appealing furniture. Their ability to bind different materials such as wood, plastic and paper has supported their use in diverse modern furniture styles. Growing construction industry is expected to drive the segment growth, For instance, growing construction industry is expected to drive the segment growth. For instance, the construction Industry in India is expected to reach US$ 1.4 Trillion by 2025. The real estate industry in India is expected to reach US$ 1 Trillion by 2030 and will contribute 13% to India’s Gross domestic product.

Regional Insights

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North America has been the dominant region in the global phenolic resins market over the past few decades with 46.7%. The widespread presence of major end-use industries such as construction, automotive and furniture has been the key driving factor. In particular, the phenomenal growth of the building and construction sector in the U.S. and Canada post 2008 recession stimulated huge demand for various building materials that use phenolic resins as adhesives and binders. Stringent environmental regulations mandating the use of low-emission materials have led to substitution of toxic formaldehyde-based resins with greener phenolic resins. This regulatory push gave an added impetus to existing demand from predominant end-user industries. The region is also a front-runner in innovation, with leading companies consistently introducing upgraded product variants. Strong penetration of organized retail and e-commerce has augmented sales further. Proximity to key export markets in Latin America and Europe also makes North America a price-competitive supplier for certain phenolic resin grades internationally.

The Asia Pacific region has emerged as the fastest growing regional market over the past five years, majorly driven by China and India. Rapid industrialization and strong GDP growth rates have fueled the expansion of end-use segments like construction and furniture production massively. China is a global manufacturing powerhouse accounting for a bulk of worldwide phenolic resins consumption. Its sturdy export-driven economy ensures consistent demand. India too is witnessing a construction boom along with flourishing automotive and electrical industries where phenolic resins have wide applicability.

Market Report Scope

Phenolic Resins Industry News

• That strategic acquisition by DIC Corporation of Guangdong TOD New Material Co., Ltd. in July 2022 is a significant move to bolster its phenolic resins capacity in the region. This acquisition is poised to enable DIC Corporation to operate at nearly full production capacity in Asia, positioning them to meet the increasing demand for phenolic resins effectively. By expanding its capabilities through this acquisition, DIC Corporation is not only enhancing its production capacity but also strengthening its market position in the industry. This strategic decision aligns with their goal of meeting market demands and solidifying their presence in the competitive landscape of coating resins.
• The acquisition of SI Group's industrial resins business by ASK Chemicals Group in November 2022 marks a significant milestone for the company. This strategic purchase encompasses resin manufacturing facilities in key regions like Brazil, India, and South Africa, along with licensed technology and tolling agreements. By integrating these assets into its portfolio, ASK Chemicals is not only enhancing its presence in the foundry market but also making a notable entry into the phenolic industrial resin sector. This move underscores ASK Chemicals' commitment to expanding its capabilities, diversifying its product offerings, and solidifying its position as a key player in the industry.
• The development of a solid novolac phenolic resin by Sumitomo Bakelite in September 2020 using nonedible lignin as raw material represents a significant advancement in resin technology. This innovative resin not only showcases the company's commitment to sustainability by utilizing nonedible lignin but also opens up new possibilities for commercial production. With its wide utility in auto applications, especially in electric vehicles, this novel resin is poised to play a crucial role in enhancing the performance and sustainability of automotive components.
• The acquisition of Phenolic Specialty Resin, Hexamine, and the European-based Forest Products Resins businesses from Hexion, Inc. by Black Diamond and Investindustrial in September 2020 marks a strategic move in the industry. Black Diamond, known for manufacturing equipment for climbing, skiing, and mountain sports, along with Investindustrial, a global private equity firm specializing in mid-market company buyouts, have expanded their portfolio by acquiring these businesses.

*Definition: The phenolic resins market consists of the manufacturing and sale of phenolic resins. Phenolic resins are synthetic polymers that are produced by the condensation of an aromatic alcohol, usually phenol, and an aldehyde, usually formaldehyde. They are commonly known as novolacs and resoles. Phenolic resins are versatile adhesives that are heat-resistant and hard. They are used in applications such as laminates, wood adhesives, molding compounds, insulation

Market Segmentation

•  Product Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Resole
  • Novolac
  • Others
•  Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Wood Adhesives
  • Molding Compounds
  • Laminates
  • Insulation
  • Others
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • BASF SE
  • Chang Chun Plastics Co. Ltd.
  • Georgia Pacific Chemicals LLC
  • Kolon Industries Inc.
  • Prefere Resins
  • Mitsui Chemicals Inc.
  • Sumitomo Bakelite Co., Ltd
  • Hitachi Chemical Co. Ltd.
  • SI Group, Inc.
  • Momentive Specialty Chemicals, Inc.
  • Romit Resins Pvt. Ltd.
  • RIECO Industries
  • Saraf Resin and Chemicals Pvt. Ltd.
  • Kaydee Corporation
  • ABR Organic Limited
  • Revex Group
  • Uniform Synthetics
  • Polyols And Polymers