Phosphate Ester Market is forecast to reach $1.1 billion by 2026, after growing at a CAGR of 6.5% during 2021-2026, owing to the increasing usage of phosphate ester for various applications such as alkaline detergent, lubricants, lubricants, and more. The demand for phosphate ester is on an upsurge for various applications owing to its extensive characteristics such as excellent fire resistance, good thermal stability, excellent boundary lubrication properties, and more. Globally, the development of efficient and advanced technology, demand for lubricant additives in the automotive and aerospace industry, increasing government initiative across the globe, increasing demand as a lubricant for industrial applications are the prime growth drivers of the global phosphate ester market. In addition, an increase in the adoption of phosphate ester for applications in newer industry verticals will create new opportunities for the global phosphate ester market, which will then substantially drive the phosphate ester market during the forecast period.
Phosphate Ester Market Segment Analysis - By Grade
The triaryl phosphate ester segment held the largest share in the phosphate ester market in 2020, owing to the increasing demand for Triaryl phosphate esters in the market. Due to their anti-foaming properties, it finds significant usage in hydraulic fluids used in power steering systems, hydraulic brakes, aircraft flight control systems, etc. The product also has extended application as fire retardants due to its enhanced self-extinguishing properties. Thus, these extensive catalytic refining properties of triaryl phosphate ester are the key factor anticipated to boost the demand for triaryl phosphate ester during the forecast period.
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Phosphate Ester Market Segment Analysis - By Application
The flame retardant segment held the largest share in the phosphate ester market in 2020 and is growing at a CAGR of 7.1%, owing to the increasing usage of phosphate esters as flame-retardant material. Phosphate esters are added to consumer and industrial products such as plasticizers, hydraulic fluids, solvents, extraction agents, antifoam agents, and coatings for electronics. Phosphate esters are the most fire-resistant of the non-aqueous synthetic base stocks in common use. Their high ignition temperatures, excellent oxidation stability, and very low vapour pressures make them difficult to burn, while their low heats of combustion result in self-extinguishing fluids. Thus, it is anticipated that this extensive property of phosphate ester will drive its demand as a flame retardant during the forecast period.
Phosphate Ester Market Segment Analysis - By Geography
Asia Pacific region held the largest share in the phosphate ester market in 2020 up to 39.2%, owing to the flourishing electronics and construction sector in the region. Phosphate ester is extensively used in the construction and electronics industry as coating and flame retardant respectively. According to the Electronic Industries Association of India (ELCINA), the total production of the electronics sector in India was Rs.3,87,525 crore in 2017-18, compared to Rs.3,17,331 crore in 2016-17, exhibiting a growth of about 22%. According to Invest India, the Consumer Electronics and Appliances Industry in India is expected to become the fifth-largest in the world by 2025. By 2025, India could create a digital economy of $800 billion to $1 trillion, and India’s digital economy could fuel 18–23% of overall economic activity by 2025. According to the International Trade Administration (ITA), the Chinese construction industry is forecasted to grow at an annual average of 5% in real terms between 2019 and 2023. Thus, it is anticipated that with the flourishing electronics and construction industry, there will be an upsurge in the demand for phosphate ester, which will subsequently drive the phosphate ester market growth during the forecast period.
Phosphate Ester Market Drivers
Increasing Agricultural Initiatives By The Government
Due to the heavy pressure of the population in underdeveloped and developing countries and its rapid increase, the demand for food is increasing at a fast rate owing to which the governments are spending heavily on initiatives and investments in the field of agriculture. The United States Department of Agriculture took an initiative – “The Agriculture and Food Research Initiative (AFRI)” to ensure food safety and security and train the next generation of the agricultural workforce. In 2020, the Canadian government invested a total of $560,000 in the Canadian Federation of Agriculture (CFA) to develop the Canadian Agri-Food Sustainability Initiative. The European government has taken initiatives such as the Common Agricultural Policy (CAP) and Young Farmers. The 2010- 2013 National Strategy for France’s Sustainable Development aimed to develop more sustainable food production and support a green economy and business innovation, and during the tenure, it achieved a higher domestic organic production and consumption. Thus, due to the various initiatives by the government, agricultural production is also set to increase. And since phosphate ester is widely used as a pesticide, the flourishing agriculture sector act as a driver for the phosphate ester market.
Increasing Automotive Industry
The growing population along with advanced living standards has significantly upsurge sustainable products. Phosphate esters are broadly used in the automobile industry where the high temperature could pose fire hazards. Phosphate-esters are widely used as an anti-wear additive, corrosion, and staining inhibitors in automobiles. In 2018, according to OICA, the automotive production in India, Thailand, Indonesia, and Malaysia has increased up to 5174645, 2167694, 1343714, and 564800, i.e., 8.0%, 9.0%, 10.3%, and 12.2% higher than the previous year due to rising per capita income of the individuals. According to the International Trade Administration (ITA), the Chinese government is expecting that automobile production will reach 35 million by 2025. And according to Stats Sa, the total motor sale of South Africa in January 2018 was accounted to be 54,620 which increased to 55,156 in January 2019. With the increasing automotive industry, the demand for phosphate esters will also increase. Thus, the increasing automotive industry acts as a driver for the phosphate ester market during the forecast period.
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Phosphate Ester Market Challenges
High Cost of Phosphate Ester
Phosphate esters are more environment-friendly as compared to other fire retardants but are priced higher than these retardants. On average, phosphate esters cost five times more than their mineral counterparts. Phosphate esters are a class of organophosphorus compounds that are a complex mixture of monoester, diester, phosphoric acid, and free nonionic material. The price increase is being driven by escalating raw material costs. According to the Government of India Department of fertilizers, the price of Phosphoric Acid (CFR) has increased by about 25.6% from USD 581 /MT in June 2017 to USD 730 /MT in June 2018. Any low-cost substitute will pose a threat to the phosphate esters market. Thus, the high cost of phosphate esters is estimated to hamper market growth during the forecast period.
Covid-19 Impact on the Phosphate Ester Market
Due to the pandemic, there’s been a supply chain disruption in the global and local enterprises which are dealing with the manufacturing of phosphate esters. Due to the coronavirus, the production in these sectors is experiencing difficulties like untimely deliveries of phosphate esters. In addition, the COVID-19 outbreak is having a huge impact on the automotive industry. The production of automobiles has been disruptively stopped, contributing to a major loss in the total automotive sectors. There has been a temporary suspension of automotive production in various regions. According to the European Automobile Manufacturers Association, In June 2020, demand for new commercial vehicles across the EU remained weak (-20.3%). With the decrease in automotive production, the demand for phosphate esters has significantly fallen, which is having a major impact on the phosphate ester market.
Phosphate Ester Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the phosphate ester market. In 2020, the market of phosphate ester has been consolidated by the top five players accounting for xx% of the share. Major players in the phosphate ester market are Lanxess AG, Solvay S.A., Akzo Nobel N.V., Elementis PLC, Eastman chemical company, Exxon Mobil Corporation, Ashland Inc., Castrol Ltd., Dow Chemical Company, Croda International Plc, Israel Chemical Ltd., BASF SE, Clariant International Ltd., Lakeland Laboratories Ltd., Daihachi chemical co., and Stepan Company.
Acquisitions/Technology Launches
In April 2016, Clariant International Ltd. increased its capacity of phosphate esters at its Germany plant, to expand their existing production at its knapsack facility. This new capacity enabled the company to cater to the growing demand from customers operating globally in the industrial lubricants, crop solutions, paint & coating, and personal care segment.
Key Takeaways
Asia Pacific dominates the phosphate ester market, owing to the increased use of non-halogenated phosphorus esters for various applications, such as lubricants, paints & coatings, and surfactants, among others in the region.
Phosphate esters are extensively used as plasticizers with various polymers, such as chloride, thermoplastic polyurethane, and polyurethane foams, as they offer good gelling behaviour and low-temperature performance.
Crude oils containing naphthenic acids can cause a variety of corrosion problems in any of several process areas. In commercial applications, certain high-temperature corrosion inhibitors with a general phosphate ester structure have demonstrated good mitigation of naphthenic acid corrosion.
In addition, the demand for phosphate ester is gradually rising in various end-use industries as they offer good fire retardant and self-extinguishing properties, which are useful in various applications to improve the behaviour of plasticized polymers.
Functioning as the gelling agent in gelled oil fluids, phosphate ester could cause fouling in refinery equipment. It is therefore desirable to lower the dosage of the phosphate ester-based gelling agent as much as possible, but without adversely affecting the fluid performance, which may restrain the market growth.
Due to the Covid-19 pandemic, most of the countries have gone under lockdown, due to which various industries such as automotive, construction, and so on are disruptively stopped, which is hampering the phosphate ester market growth.
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