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A Complete Risk Analysis for Your Business in the Epoxy Resin Market

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Epoxy and resin are two similar materials that are often used interchangeably. Epoxy resins are polyepoxides that are reactive polymers and prepolymers. Different types of epoxy resins are Bisphenol-based epoxy resins and curing epoxy resins. Bisphenol-based epoxy resins are most used resin types across the globe. On the other hand, curing epoxy resins are the less used on an industrial level due to their poor mechanical properties, poor heat bearing properties, and not so good chemical properties. Different types of epoxy resins are now being used in various commercial and non-commercial applications such as construction, and decorative uses. Epoxy resins inherently have excellent adhesive and coating properties that make it a preferred choice over standard adhesives. Apart from being used as adhesives, epoxy resins are used in paints, primers, flooring, sealers, and coatings in product manufacturing and/or construction.

The global epoxy resin market is huge and it is growing with a rapid pace in different regions across the globe. Region such as APAC are likely to witness high demand and consequently high growth rates till 2022. Such a high demand is driven by end-use industries including construction, automobile, and electronics. The electronics segment is also likely to grow at a Compound Annual Growth Rate (CAGR) of 5 percent and growing smartphone and wearable gadget markets can be considered major drivers for such a growth.   However, North America and Europe are not that far from such a growth as the demand is going to rise continuously due to renewable energy initiatives such as windmill installations. The global epoxy resin market is also not subject to high imports/exports as the major reasons including North America, Europe, and APAC are self-sufficient in terms of production of epoxy resin and meeting the domestic demand. 

Starting a Business in the Epoxy Resin Market:

The demand for epoxy resin on a global level is largely affected by the growth of the end-use industries such as construction, electronics, and automobile. Entrepreneurs who are willing to start a business in the industry or who have recently started an epoxy resin business should perform a thorough risk analysis for a clear understanding of the global market dynamics. However, they need to have clarity of the related factors such as global market outlook, supply-demand analysis, and industry best practices. Here is a detailed explanation of these factors for conducting a risk analysis for an epoxy resin business.

  • The current global epoxy resin market is witnessing a supply glut. The APAC holds the maximum capacity share of 75 percent which itself is a huge cap. Similarly, APAC also holds the maximum market share of 77.3 percent. On the other hand, western markets such as North America and European Union hold 9.3 and 11.6 percent market share respectively. Despite having the high capacity glut and holding the maximum market share, APAC has lower supplier power than North America and Europe. The top global suppliers in the epoxy resin market are Kukdo, Sammu Group, Nan Ya, Hexion, and Chang Chun.
  • Increasing urbanization and industrialization is also driving the demand for products such as paints, coatings, and adhesives. This is specifically prevalent in the APAC and similar developing regions with emerging economies. On the other hand, the epoxy resin demand in the U.S. and Europe is rising in the waterborne composite applications in the industries such as aircrafts, aerospace, and marine coatings. This demand is likely to sustain for at least next 2-5 years.
  • Talking about the industry best practices, spot contracts and long-term contract buying are the standard buying practices. Europe and North American regions usually consist of large volume buyers that prefer long-term contract buying. The long-term contracts usually last for 2-3 years with price revisions on a quarterly basis. In the APAC region, spot contract is a preferred practice.
  • Another aspect of risk analysis is the domain chosen by the entrepreneurs. The challenges in the global epoxy resin market are another factor that can present significant risks. Though epoxy resin is non-toxic and not very harmful for the environment, stringent environmental regulations are being placed to reduce the use of epoxy resins on a global level. Nonetheless, eco-friendly epoxy resins are also being used in similar applications. In addition, eco-friendly epoxy resins are environment-friendly alternatives that are being encouraged by the industry due to their lower carbon footprint and bio-degradability.

Epoxy resins are versatile materials derived from the plants found in specific global regions. The versatility of epoxy resins makes them an ideal material for applications such as adhesion, coating, pain, and decorative. The global epoxy resin industry is also growing at a rapid pace which may lead to capacity glut but a few regions are not willing to do that due to low demands. This may not affect the market for now, but it may hinder the market growth in the long-run.