Nitrocellulose Market is forecast to reach $685 million by 2026, after growing at a CAGR of 5.84% during 2021-2026. Nitrocellulose, also called cellulose nitrate, a mixture of nitric esters of cellulose, and a highly flammable compound that is the main ingredient of modern gunpowder and is also employed in certain lacquers and paints. Extensive properties of nitrocellulose such as better adhesion and non-reactivity to other paints are the key influencing factors for the growth of the nitrocellulose market. There has been a rise in printing ink applications in the recent past, which is expected to have a positive impact on market growth. Globally increasing demand for printing ink in the packaging industry is expected to remain a key growth driver for the nitrocellulose market during the forecast period.
Nitrocellulose Market Segment Analysis – By Product
The M grade cellulose segment held a significant share in the nitrocellulose market in 2020. All these factors are driving the growth of the nitrocellulose market during the forecast period. In M grade cellulose, it is highly utilized in consumer products such as thickener and emulsifier in lubricants in nutritional supplement capsules and others. And the demand for emulsifiers from the automotive and aerospace industry is on an upsurge. Thus, the demand for M grade cellulose is anticipated to substantially increase during the forecast period, which will then drive the nitrocellulose market growth during the forecast period.
Nitrocellulose Market Segment Analysis – By Application
The paints and coatings application held the largest share in the nitrocellulose market in 2020 and is growing at a CAGR of 4.15%, owing to the increasing demand for nitrocellulose as an intermediate for paint and coatings from various end-use industries. High nitrogen, high viscosity grades of nitrocellulose are often extensively used to formulate specialist paints for refinishing and repair in the various end-use industries, where film strength and flexibility is essential. Nitrocellulose is widely used as auto-refinish paints in the automotive industry owing to its excellent characteristics good durability, excellent mechanical and chemical resistance, and more. All these factors are driving the growth of the nitrocellulose market during the forecast period.
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Nitrocellulose Market Segment Analysis – By End-Use Industry
The building and construction segment held a significant share in the nitrocellulose market in 2020, owing to the increasing usage of nitrocellulose to manufacture paints and coatings, which are then used in the construction sector. The paints and coatings are long-lasting, have low odour, and hygienic coats that are perfect for every unique residential building. Paints and coatings can achieve mat and glossy finishes while being durable and affordable. They are characterized by their ease of application, and painted surfaces are easy to clean. Paints and coatings are commonly used in walls, doors, windows, and metal structures. Thus, this drives the demand for paints and coatings in residential areas. Government initiatives in India such as ‘Smart City Mission’ and ‘Housing for All’ are projected to drive the growth in the construction sector which, in turn, will benefit the nitrocellulose market during the forecast period. Increasing use of paints & coatings in residential buildings owing to its various functional benefits, such as conduction, light absorption, insulation, anti-skid property, and reflection, is anticipated to substantially drive the nitrocellulose market over the forecast period.
Nitrocellulose Market Segment Analysis – By Geography
Asia Pacific region held the largest share in the nitrocellulose market in 2020 up to 45%, owing to the increasing automotive manufacturing in the region. Nitrocellulose based automotive paints enhance the aesthetic appearance, as well as protect against scratches, UV rays, corrosion, oxidation, and acid rains. According to OICA, in 2018 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 which further led to the massive demand for advanced lightweight automotive materials in APAC region. In June 2017, Clean Energy Ministerial launched a campaign EV30@30 to accelerate the utilization of electric vehicles across the globe. This led to an increased number of electric vehicles and is anticipated to further increase the manufacturing of electric vehicles in the coming years. According to the Department for Promotion of Industry and Internal Trade (DPIIT), the Indian automotive industry has attracted Foreign Direct Investment (FDI) worth US$ 22.35 billion during the period April 2000 to June 2019. The increasing automation industry in the Asia Pacific is likely to influence the growth of the automotive lightweight materials market in the APAC region.
Nitrocellulose Market Drivers
Wide Applications of Nitrocellulose
The nitrocellulose-based wood coating is extensively utilized in sliding doors and windows, decking of furniture, and more, in the building and construction industry. According to the US Census Bureau, in February 2020 total construction was at a seasonally adjusted annual rate of 1,366,697 which is 6.0 percent above the February 2019 rate of 1,288,951. The rapid growth of the building and construction industry, and improving the standard of living has boosted the demand for furniture, which will likely propel the nitrocellulose market growth. Nitrocellulose is also used in a typical nail lacquer formulation. Its excellent adhesion property to the natural nail makes it an indispensable ingredient in the nail lacquer formulation. Nail coatings formulated with nitrocellulose are semi-occlusive that is, they protect the nail and at the same time allow the nail to breathe. According to International Trade Administration (ITA), in 2017 South Korean’s market size was approximately $8.8 billion, the total local production increased by 3.6% from the previous year and the market is growing by an annual growth rate of 4.7% for the last 5 years (2013-2017). Thus, with the expanding cosmetics industry across the globe, the demand for nail varnish applications is likely to increase product consumption over the forecast period. In addition, nitrocellulose containing explosives are widely used by the international military community for propelling projectiles. All these extensive applications of nitrocellulose act as a driver for the nitrocellulose market during the forecast period.
Increasing E-Commerce Platform
Printing inks find applications in packaging, publication, and textile industries as they enable the smoother functioning of modern printing machines and provide better work quality. According to the U.S. Census Bureau, the estimate of U.S. retail e-commerce sales for the first quarter of 2020, adjusted for seasonal variation, but not for price changes, was $160.3 billion, an increase of 2.4 percent (±1.1%) from the fourth quarter of 2019. According to the International Trade Administration (ITA), Malaysia is an attractive market for e-commerce in Southeast Asia due to its dynamic economy and developed infrastructure for digital technologies. Malaysia’s e-Commerce sector is benefiting from the implementation of programs under the National E-Commerce Strategic Roadmap (NeSR). The National E-Commerce Council (NeCC), established to drive the implementation of the roadmap towards doubling Malaysia’s e-Commerce growth rate to reach a GDP contribution of USD 53 billion by 2020. Japan is the third largest and fastest-growing e-commerce markets in the world. With Internet penetration estimated at 93.3% of the population, Japan represents a significant market opportunity. According to the Ecommerce Foundation’s Japan 2017 report, the E-GDP was forecasted to rise 1.59% in 2017, with 74% of the online population shopping online. The demand for online shopping is increasing in emerging countries and labels, plastic bags, and invoices are used for packaging, which eventually needs printing inks for labeling of deliverable packages. Thus, the increase of e-commerce platform acts as a driver for the nitrocellulose market.
Nitrocellulose Market Challenges
Flammability and Health Hazard Issues of Nitrocellulose
Fires often occur at paint and ink manufacturing factories, where nitrocellulose damped with isopropanol (or isopropyl alcohol) is used in the blending process. As nitrocellulose is a highly flammable chemical, the fires are likely caused by the ignition of residual nitrocellulose in the blending machine or by nitrocellulose stored on the factory premises. Inhaling nitrocellulose can irritate your nose, throat, skin, and eyes. It can also cause dryness of skin and dermatitis. The common damping agent isopropyl alcohol can irritate the eyes and skin. Due to its higher vapour pressure, isopropyl alcohol is more volatile than nitrocellulose and thus its vapours are easily inhaled. Exposure to high concentrations of the solvents used as damping agents can cause dizziness, difficulties in breathing, and even result in unconsciousness. Also, handling a strong acid, such as sulfuric acid, can cause significant harm. In addition, long-term exposure to damped nitrocellulose can lead to chronic health effects such as kidney and liver damage, depression of the central nervous system, and permanent eye damage. Toxic gases, such as oxides of nitrogen, hydrogen cyanide, and carbon monoxide, which may be produced during decomposition or combustion of nitrocellulose, also pose health hazards. All these factors will hinder the nitrocellulose market growth.
Covid-19 Impact on The Nitrocellulose Market
Due to the Covid-19 outbreak, the automotive industry has been hit by a triple whammy: factory closures, supply chain disruption, and a collapse in demand. The automotive industries are facing issues such as delays in receiving nitrocellulose from the manufacturers due to the restriction on the import and export of commodities. The pandemic 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. According to the European Automobile Manufacturers Association, In June 2020, demand for new commercial vehicles across the EU remained weak (-20.3%), although the rate of decline slowed compared to April and May. Three out of the four largest markets in the region posted double-digit percentage declines last month: Germany (-30.5%), Spain (-24.2%), and Italy (-12.8%), while France recorded a modest increase (+2.2%). With the decrease in automotive production, the demand for nitrocellulose has significantly fallen, which is having a major impact on the nitrocellulose market.
Nitrocellulose Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the nitrocellulose market. In 2019, the market of nitrocellulose has been consolidated by the top five players accounting for xx% of the share. Major players in the nitrocellulose market are Dow Wolff Cellulosics, Nitro Quimica, IVM Chemicals, Nitro Chemical Industry, Nitro Chemical Industry Co., Ltd., Nitrex Chemicals India Pvt. Ltd., and TNC Industrial Co., Ltd.
In February 2017, Nitro Quimica launched its new product brand structure for nitrocellulose along with the expansion of its products and service portfolio. This initiative enhanced nitrocellulose and derivatives product portfolio inks & varnishes applications. Furthermore, the company has been investing nearly 2% of its annual revenue in R&D to enable the development of new products.
In June 2016, Nitro Quimica Corporation acquired Alchemix Corporation, a producer of nitrocellulose-based solutions for dermatological products. This acquisition enabled the expansion of the company’s product portfolio and strengthened its participation in the North American market.
In July 2016, Nippon Paint India partnered with the cellulose-based manufacturer, IVM Chemicals to promote its wood coating products based on Japanese technology. This partnership promoted Nippon Paint’s existing coating products and IVM chemical brands in India.
Asia-Pacific dominates the nitrocellulose market, owing to the rising demand for nitrocellulose in the paint and coating sectors in the region. Increased urbanization and purchases are also the key factors driving the nitrocellulose market in APAC.
Printing inks containing cellulose nitrate offer graphics with high brilliance & resolution provide complete solvent evaporation and allow high printing speeds to be achieved in modern printing machines owing to which its demand is increasing during the forecast period.
However, the steady rise of digital media has shrunk the print media market by which many players have shifted at least half of their marketing spending from traditional to digital advertising over the last few years, which may restrain the nitrocellulose market growth.
Due to the COVID-19 pandemic, most of the countries have gone under lockdown, due to which operations of various industries such as coatings and paints have been negatively affected, which is limiting the nitrocellulose market growth.
Related Reports :
A. Paints and Coatings Market
B. Printing Inks Market
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