Rising demand forecast for ATH flame retardants

By Davide Ghilotti
Published: Tuesday, 27 September 2016

North America and Asia to drive growth; Regulation and environment key factors; Construction and electronics main markets

The alumina tryhidrate (ATH) flame retardant materials segment harbours strong expansion opportunities on the back of growing demand in both eastern and western markets, according to a report from French-headquartered technology research analyst ReportLinker.

The usage of ATH flame retardants in the global composites industry will grow at a CAGR of 4.9% by value from 2016 to 2021, ReportLinker forecast in a report in September.

ATH’s largest consumer industries at present are construction and building materials, automotive and transportation, electrical/electronics and consumer goods – the latter category includes furnishing, upholstery and related.

The main drivers of the expected growth for the sector will be increasing demand for sheet moulding and bulk moulding compounds used in industries ranging from electrical and electronics to automotive.

Electrical applications – such as cable and wires – are expected to remain the largest market for ATH flame retardants in the coming years, according to ReportLinker, supported by stringent safety standards applied by national regulators and a growing focus on the use of environmentally-friendly materials.

ATH is the most common flame retardant material that is halogen-free. A number of suppliers, as well as health and safety regulators, are in the process of phasing out halogenated bromine-based flame retardants (BFRs), which carry environmental and health hazards.

ReportLinker forecasts "above average growth" for ATH in electrical & electronics in the five-year period.

As regards geographical reach, North America is expected to remain the largest market due to growth in electrical and automotive applications coupled with stricter restriction of halogenated materials’ usage in flame retardants.

Asia-Pacific is another main region where demand is forecast to increase in the period, on the back of local governments improving fire-hazard regulations.

This confirms viewpoints IM heard from some ATH suppliers, who identified main Asia-Pacific countries as some of the fastest-growing markets for their products.

Among the factors driving the expansion, contacts named the expansion in construction – driving the cables and wires segment – renovation of old buildings and infrastructure and high demand for consumer goods.

This perception is what led German speciality alumina producer Nabaltec AG to set up a Japanese subsidiary, Nabaltec Asia Pacific KK. In July, the company told IM that Asia would be a core focus for its flame retardants business.

Nabaltec ups hydroxide prices by almost 10%
  • Tightness in US supply after shutdowns
  • Price flatness for several years
  • ATH market expected to appreciate in 2017

Davide Ghilotti

Nabaltec AG will increase the prices of its fine precipitated aluminium hydroxide (or alumina trihydrate) products by 9.5% from next year, the company announced in September.

The price hike will be rolled out from January, or as current contr-acts allow, and will apply to all alumina trihydrate (ATH) lines under the APYRAL range to all destinations.

In a statement, Nabaltec cited a "need for high investments" and an "increase in costs in all areas" as reasons behind the price change.

Johannes Heckmann, member of the board at Nabaltec, told IM: "Several factors have led to this situation. Our cost curve has not shown any increment since 2011 – it’s been mainly a flat line."

"Demand for ATH as flame retardant is increasing and we’ve been running behind the demand curve," he added.

Heckmann said the company has in the meantime seen rises in labour, energy and raw material costs, as well as having invested to expand its capacity.

He added that the recent temporary closure of Nashtec LLC, Nabaltec’s US operation that used to produce ATH products for flame retardant use, "doesn’t really play a role here", but noted that two main US facilities – Sherwin Alumina and Alcoa, Point Comfort – have closed down, while Noranda remains in Chapter 11, creating a situation of tight supply.

Heckmann forecasts that the ATH market will appreciate next year, as higher demand comes to terms with lower supply.

"Availability of ATH on the market is limited. Prices will certainly rise in 2017," he told IM.