| |
Polyalkylene glycols (PAGs) are used in a wide variety of end-use markets;
this report concentrates on nonurethane applications. These include markets
for surface-active agents, functional fluids, lubricants and chemical intermediates.
Sales in the primary end markets for polyalkylene glycols depend on the performance
of the general economy. Key findings and future implications for the polyalkylene
glycols market include the following:
- The majority of the PAG industry is a commodity-based business and competes
with imports from several Asian countries and recently from Eastern European
countries, especially with liquid (low-molecular-weight) PEGs (polyethylene
glycols).
- The PAG market is at continued high risk for consolidation of producers
as new plant capacity will be added in China (including partnerships with
major Japanese and non-Asian producers).
- Small regional producers are at risk for consolidation or closure, especially
if they supply commodity products.
- The increasing costs of raw materials manufactured from natural gas and
crude oil feedstocks, such as ethylene oxide, propylene oxide, diols and
polyhydric alcohols, could negatively affect the profitability of PAG consumers;
hence, demand may slow or decline.
- Further consolidation in the market, including the closure of smaller unprofitable
plants, mergers and acquisitions, are expected for the next several years.
Nearly fifty companies produce polyalkylene glycols in the United States,
Western Europe and Japan; another forty to fifty companies produce PAGs in
the rest of the world.
The polyalkylene glycol (PAG) industry and the markets it serves are extremely
complex, in part reflecting the large number of PAG producers; the numerous
types of PAGs (including formulated products); the wide range of end-use markets,
each with many customers; and the high levels of customer service required
in selected markets. |
