The Adipic Acid Market is estimated to be valued at USD 6.45 billion in 2024, exhibiting a CAGR of 4.2% over the forecast period (2024-2031). Furthermore, the market is anticipated to garner significant gains on account of increasing demand from nylon production globally.
Increased demand from nylon production
Adipic acid serves as a key raw material in the production of nylon 66, one of the most widely used engineering plastics. Rising automotive and textile industries coupled with growth in other end-use sectors are augmenting the demand for nylon. This in turn is driving the consumption of adipic acid.
Expansion in production capacities
Leading players in the adipic acid market are heavily investing in capacity expansion projects to cater to the growing demand. For instance, in 2023, BASF SE, a chemical company, announced plans to increase its adipic acid capacities at its Ludwigshafen, Germany site by 60kt/a with the project expected to be completed by 2025. Such expansion plans by manufacturers are projected to boost the market growth over the forecast period.
Growing Demand from Nylon Production is Driving the Adipic Acid Market
One of the biggest drivers of the adipic acid market is the growing demand from nylon production. Adipic acid is a primary raw material used in the production of nylon 66, which is widely used to manufacture fibers, engineering resins and films. The global nylon market has been growing steadily due to rising demand from end-use industries such as automotive, textiles, electrical & electronics and consumer goods. Nylon fibers are increasingly being used in carpets and upholstery due to their desirable properties like durability, elasticity and abrasion resistance. Growing automobile production is another major factor fueling the demand for nylon in applications like airbag fabrics, fuel lines and interiors. With the nylon industry expected to continue its positive expansion in the coming years, demand for adipic acid as a key feedstock component will also rise significantly.
Increasing Applications in Polyurethanes Boosts the Adipic Acid Industry
Another major driver for adipic acid is its increasing use in polyurethanes production. Adipic acid is a key monomer used in the manufacture of aliphatic polyester polyols, which are further used to make polyurethane foams, elastomers, coatings, and adhesives. Polyurethanes find applications across various end-use sectors including bedding & furniture, construction, automotive, footwear and insulation. Growth in these downstream industries worldwide has augmented the demand for polyurethanes and adipic acid. Additionally, adipic acid-based polyurethanes are environment-friendly alternatives to petrochemical-based polyols. This offers new opportunities for adipic acid manufacturers. The rising focus on sustainability is expected to further expand the applications of adipic acid in polyurethane production going ahead.
Fluctuating Prices of Raw Materials Pose a Threat
One major restraint affecting the adipic acid market is the fluctuating prices of its key raw materials. Adipic acid is manufactured through a two-step oxidation process using cyclohexanol/cyclohexane and nitric acid as primary feedstocks. The prices of these raw materials tend to vary significantly depending on factors like crude oil prices, demand-supply dynamics and geopolitical issues. Frequent fluctuations make production planning and pricing difficult for adipic acid producers. Additionally, these raw materials are also used in other industries, and their tight supply availability raises manufacturing costs for adipic acid. Any sharp rise in feedstock costs can squeeze the margins of players operating in this commodity chemical market. To counter overdependence on imports, companies are now focusing on developing alternative plant-based materials and processes.
Environmental Regulations Limit Capacity Expansions
Stringent environmental regulations in major markets pose another challenge for stakeholders. The adipic acid production process generates nitrous oxide (NPO) emissions, which have high global warming potential. Existing plants have to meet tighter emission standards enforced by agencies like the EPA in the U.S. and REACH in the EU. Obtaining permits for capacity expansions or new plants has become longer and more difficult due to lower emission limits. Significant investments are needed to install abatement technologies like NPO destruction catalysts. Smaller players struggling to meet standards may face closures. Meanwhile, regulations in Asia Pacific are also getting strengthened. Compliance issues hamper the potential capacity additions required to fulfill the growing demand for adipic acid.
Bio-based Production Presents Significant Opportunities
One major opportunity for adipic acid manufacturers lies in bio-based production methods. Several companies are actively researching the development of renewable adipic acid using biomass-derived feedstocks like glucose, sucrose, and vegetable oils. Renewable adipic acid helps lower dependence on fossil fuels and reduces nitrous oxide emissions. As sustainability gains increasing importance, bio-based adipic acid is expected to experience meteoric rise in demand from industries striving to improve their green credentials. Government incentives promoting renewable chemicals also benefit such environment-friendly production technologies. Additional opportunities exist in niche applications of derivatives like polyester polyols in high-performance coatings and specialty polymers markets.
Asia Pacific Offers Huge Growth Potential
Asia Pacific presents immense growth opportunities for adipic acid providers. Rapid industrialization and infrastructure development activities are driving the demand for nylon and polyurethanes in Asia Pacific countries. China dominates the global adipic acid supply, while other Asian nations like India and Southeast Asian countries are expected to witness tremendous capacity additions over the coming years. Investments are being made to establish new production plants as well as expand the capacities of existing facilities.
Link - https://www.coherentmarketinsights.com/market-insight/adipic-acid-market-318
Key Developments
- In 2022, Toray Industries, Inc., a leading Japanese chemical company, announced a groundbreaking development - the world's first 100% bio-based adipic acid. Adipic acid is a key raw material for the production of nylon 66 (also known as polyamide 66), a widely used synthetic polymer.
- In 2022, the German specialty chemicals company Lanxess and the private equity firm Advent International announced the acquisition of the Engineering Materials business from the Dutch multinational Royal DSM for a purchase price of around EUR 3.7 billion.
- In 2021, the Japanese chemical and engineering conglomerate Asahi Kasei established a group-wide data management platform called "Data Exploration and Exchange Pipeline" (DEEP) to accelerate its Digital Transformation (DX) efforts across the entire Asahi Kasei Group. The platform was launched and began operations in April 2022.
- In 2021, Ascend Performance Materials, a leading global producer of high-performance engineered materials, announced plans to purchase a compounding facility in San Jose Iturbide, Mexico. This strategic move was aimed at growing the company's global footprint and expanding its production capacity for high-performance engineered materials.
Key Players
Asahi Kasei Corporation, Ascend Performance Materials, BASF SE, Invista, Lanxess Ag, PetroChina Liaoyang Petrochemical, Radici Group, Rhodia, Shandong Haili Chemical Industry Company Ltd., Shandong Hongye Chemical Company Ltd, DOMO Chemicals, Sumitomo Chemical Co., Ltd., Solvay, Liaoyang Tianhua Chemical Co., Ltd, Meru Chem Pvt. Ltd, EMCO Dyestuff, and JPM Pharma & Chemicals Pvt. Ltd.
