Polyphenylene Oxide (PPO) Market

The global polyphenylene oxide (PPO) market size was estimated at USD 523.1 million in 2017. Rising demand from industries such as automotive and electronics is expected to be one of the key trends escalating market growth. A change in the global polymer industry structure, which involves rapid growth in Asia Pacific and steady growth in North America and Europe, is anticipated to influence the market positively.

Polyphenylene oxide belongs to the class of engineered polymers. Rising awareness regarding advanced materials, which improve end product features as well as provide strength, is bolstering the demand for engineered polymers. Suppliers have now started working with original equipment manufacturers and compounders to develop new, innovative technologies and applications.

PPO is traditionally manufactured by oxidative polymerization of 2,6-dimethylphenol or adding parachlorobenzene in hydrogen sulfide solution in the presence of oxygen and by using a catalyst. The average profit margin for PPO manufacturers is 12.0% and is anticipated to stay for the next few years. Profit margins in the polymers industry have been high over the past years owing to significant decrease in oil prices. Companies are now working towards improving their profits by reducing the cost of raw materials by switching to cheaper feedstocks.

Increasing consumer expenditure on electronic devices such as smartphones, LCDs, tablets, and laptops is likely to fuel the demand for PPO over the forecast period. China is projected to hold a prominent position in the global arena, owing to increasing production facilities and growing demand from end-use application industries. The country has witnessed rapid increase in the demand for mobile devices in recent times. APAC is poised to be a promising destination for global players throughout the forecast period.

Rising demand for automotive components is expected to play a vital role in fueling demand for PPO. Rise in the number of automotive manufacturing facilities in emerging markets of Asia Pacific, Central & South America, and the Middle East & Africa is anticipated to be supplement the growth of the overall market.

Polyphenylene oxide finds application in automotive instrument panels, internal trim, headlights, wheel covers, fuse boxes, speaker grilles, mirror cases, and electrical connectors. Shift in production facilities of automotive components to emerging economies of Asia Pacific such as China, India, and Japan, owing to low-cost manufacturing is likely to stoke the product demand.

Application Insights

Surging demand for polyphenylene oxide from the automotive and electronics industries is driving the market. Electronic components are now used for applications such as mobile phones, smartphones, portable media players, home-theater, and microwaves.

Burgeoning demand for such electronic devices, especially in emerging economies, is anticipated to work in favor of the PPO market. The growth of electronic components market is spurred by newer technological developments such as digitization of consumer entertainment and communication. Rising innovation and R&D are paving way for advanced technology electronic devices, which in turn is likely to increase PPO demand worldwide.

Air separation membranes are projected to exhibit moderate growth over the forecast period. Air separation membranes are used for generating nitrogen. This technology is gaining acceptance gradually owing to high yields and growing demand for nitrogen from the fertilizer industry. PPO usage makes air separation performance suitable for low temperature applications and is touted as a potential replacement for polysulfide membranes.

The fluid handling application segment is poised to post a noteworthy CAGR during the forecast period. PPO finds application in the fluid handling sector owing to properties such as low moisture absorption, excellent strength, and stiffness. Increasing customization of fluid handling pumps to meet specific customer demands is estimated to stir up the demand for polyphenylene oxide.

Polyphenylene Oxide Market Share Insights

The market is moderately competitive in nature. The industry is expected to exhibit moderate threat from new industry participants and low potential threat from its counter products. Major industry participants include SABIC, BASF, Sumitomo Chemicals, Mitsubishi Chemical Holdings Corp., LyndollBasell Industries N.V., Solvay S.A., Asahi Kasei Chemicals Corp., Polyplastics Co. Ltd., and Momentive Performance Material (MPM) Holding LLC.

The market has witnessed rapid growth over the past few years due to increasing application of polyphenylene oxide in the automotive and electronics industries. Manufacturers are currently ramping up capacity to meet future market demand. Introduction of electric cars is going to play a crucial role in influencing competitive environment. In August 2017, Toray Industries Inc. announced that it would be constructing a new polyphenylene sulfide (PPS) production facility at the Hungarian site of its subsidiary Zoltek Companies Inc.