ADIPIC ACID MARKET ANALYSIS

Market Size and Trends

The adipic acid market is estimated to be valued at USD 6.45 Bn in 2024 and is expected to reach USD 8.60 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 4.2% from 2024 to 2031.

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The market is primarily driven by increasing demand from the nylon production industry along with demand from polyurethanes and other end-use industries. The increasing usage of nylon 66 in end-use applications like engineering plastics and fibers will drive the demand for adipic acid. Additionally, the rising consumption of polyurethanes in industries like furniture, insulation, automotive, and footwear is also expected to support the market growth during the forecast years.

Expanding Applications of Adipic Acid

The growth of end-use industries, such as nylon production, polyurethanes, and plasticizers, is presenting significant opportunities for the adipic acid market. Adipic acid finds wide usage as a precursor in the production of nylon 6,6 fibers, resins, and engineered plastics. Nylon polymers have become the material of choice for a variety of applications including brushes, gears, conveyor belts, carpet fibers, clothing, and upholstery due to their impressive strength, flexibility, and resistance to wear and tear. The burgeoning demand from the textile and automotive industries for nylon is expected to drive volumes in the adipic acid market.

The development of lightweight and high-performance nylon formulations is gaining traction. Nylon polymers blended with glass fibers are being increasingly adopted in manufacturing equipment and electrical components on account of their self-lubricating properties, fatigue resistance, and dimensional stability. This is presenting promising prospects for adipic acid manufacturers. In addition, nylon is also witnessing incremental usage in 3D printing applications such as prototyping, tooling and functional parts production owing to benefits such as high strength, low friction, and UV resistance. The emerging avenues in additive manufacturing are likely to supplement the sales of adipic acid.

Market Concentration and Competitive Landscape

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Green Adipic Acid Production

While adipic acid has prospered as a key industrial chemical intermediary, its traditional production route via oxidation of cyclohexanol/cyclohexanone with nitric acid is energy-intensive and leads to the generation of Nitrogen oxides (NOx). Stringent environmental regulations curbing NOx emissions have led adipic acid producers to invest in alternative bio-based and low-carbon production pathways. Several companies are engaged in developing yeast and enzymatic fermentation based technologies to manufacture adipic acid from renewable feedstocks such as glucose, sucrose, and lignocellulosic biomass. These novel production methods can help reduce dependence on non-renewable petroleum sources and lower greenhouse gas emissions substantially.

Governments across regions are offering incentives for the adoption of green technologies and encouraging the application of industrial biotechnology towards sustainable chemical production. The availability of policy support is convincing more players in the adipic acid market to fund R&D activities in biocatalytic routes. Additionally, the certainty of crude oil supply and fluctuating prices make renewable adipic acid an attractive option for end-use industries.

Key Takeaways from Analyst:

The adipic acid market is expected to witness steady growth over the forecast period driven by increasing demand from nylon 6,6 manufacturing industries. Asia Pacific currently dominates the global market and is likely to maintain its dominance during this period supported by rapid industrialization and infrastructure development in China and India.

North America and Western Europe are relatively mature markets but will continue expanding at a moderate rate due to ongoing industrial and construction activities. However, price fluctuations of crude oil can restrain the market since it is a key raw material for adipic acid production. Volatility in the prices of benzene and cyclohexane may also impact the adipic acid supply and costs. Meanwhile, increasing R&D towards developing bio-based production methods may provide new opportunities for sustainable adipic acid production.

The demand for lightweight and high-performance car parts made from engineered plastics like nylon also augurs well for the adipic acid market. Emerging applications of adipic acid in food additives, pharmaceuticals and other specialty chemicals are likely to spur additional growth opportunities going forward. In terms of production capacity, China dominates the global supply but other South Asian countries are emerging as alternate manufacturing hubs.

Market Challenges: Volatility in crude oil prices

Crude oil price volatility has emerged as a major concern negatively impacting the growth of Adipic Acid market. Adipic Acid is primarily manufactured from Cyclohexane which is derived from crude oil. Around 60-70% of the total production cost of Adipic Acid comprises of the raw material cost i.e. cyclohexane. Hence, crude oil price fluctuations directly contribute to the fluctuations in cyclohexane prices and overall production costs for adipic acid manufacturers.

Market Opportunities: Development of bio-based adipic acid

The development of bio-based adipic acid production holds great potential as an opportunity for future growth in the adipic acid market. Currently, almost all commercially produced adipic acid is made from non-renewable petroleum-based feedstocks. However, biobased production using renewable sources such as corn could provide a more sustainable alternative. Shifting even a portion of adipic acid production to biobased methods would significantly reduce dependence on petrochemicals and lower emissions. This environmental benefit has attracted interest from major companies as consumers increasingly demand green chemicals.

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Insights by Application: Wide range of applications drive segment growth

In terms of application, nylon 6, 6 fiber is expected to contribute 53.5% share of the market in 2024. Nylon 6, 6 fiber is the most common type of nylon used in textile applications due to its excellent durability, elasticity, and moisture-wicking properties. The fabric is widely employed in clothing like socks, underwear, sportswear, and outerwear due to its ability to retain shape over repeated washing and wearing. Its resilient nature makes it suitable for technical textiles as well. Nylon 6, 6 fiber is commonly used to produce automotive carpet fibers that can withstand high heat and abrasion inside vehicles. It is also favored for producing durable rope, twine, and netting for industrial and marine applications.

The textile industry has continued to rely heavily on nylon 6, 6 fibers to manufacture a variety of apparel and home textiles. Popular athletic brands prefer the material for moisture-management properties to keep athletes dry during exercise. Many outdoors companies use nylon 6, 6 to make lightweight and long-lasting tents, backpacks and gear. The fiber also finds application in the production of durable wetsuits for water sports. Its reputation for strength and crease-resistance has boosted its use in workwear manufacturing. Strong demand from these end-user industries ensures steady consumption of adipic acid for nylon 6, 6 fiber production.

Insights by End-use Industry: Extensive adipic acid-derived polymer consumption

In terms of end-use industry, automotive is expected to contribute 41.3% share of the market in 2024. The automotive industry utilizes significant amounts of adipic acid-derived polymers for various interior and exterior components. Nylon 6, 6 resin is widely employed to manufacture engine covers, air intake manifolds, fan shrouds, and other under-hood plastic parts that require high heat resistance. Polyurethanes produced using adipic acid see extensive application as rigid and flexible foams in vehicle instrumentation panels, door panels, armrests, headliners, and dashboards. These foams provide excellent insulation and energy absorption while reducing overall weight.

Adipic acid-based polymers are also favored for producing essential automotive wires and cables that carry power and data throughout the vehicle. Their ability to withstand heat, abrasion, and solvents in harsh under-hood conditions make nylon 6, 6 and polyurethane coating ideal choices. With automakers continuing to increase usage of these materials for achieving weight savings and performance benefits, the demand for the upstream chemical adipic acid remains robust from this end-user segment. Strict regulatory pressure to improve fuel efficiency will further propel consumption.

Regional Insights

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North America has dominated the global adipic acid market for many years owing to robust demand from the region's well-established end-use industries. The region is expected to account for 41.2% of the market share in 2024. The region is home to several major automobile manufacturers that require adipic acid for producing nylon which is used in various interior and exterior automotive parts. In addition, North America has significant presence of textile and carpet industries that utilize nylon produced from adipic acid. Many adipic acid producers have established production facilities as well as supply chain networks in the region to cater to the stable demand. The availability of raw materials along with ease of logistics and transportation further strengthens North America's position as a market leader.

However, over the past decade Asia Pacific has emerged as the fastest growing regional market for adipic acid. With expanding GDP and growing population, countries like China and India have seen rapid industrialization which is fueling demand for various end-use products that use adipic acid. The rapidly developing automobile and textile sectors particularly in China have boosted Asia Pacific's share in the global adipic acid consumption. Additionally, the region is witnessing heavy investments from adipic acid manufacturers to set up or expand production units. This is allowing the region to become more self-sufficient and less import-dependent. The strategic location of Asia Pacific makes it an attractive hub for serving the increasing local as well as exports demand. Relative availability of raw materials, affordable labor, and supportive government policies have made the region a manufacturing powerhouse for adipic acid. These factors combined with projected economic growth indicate Asia Pacific will continue dominating market trends going forward.

Market Report Scope

Key Developments

• In 2022, Toray Industries, Inc., announced that it has developed the world's first 100% bio-based adipic acid, a raw material for nylon 66 (polyamide 66), from sugars derived from inedible biomass.
• In May 2022, Lanxess and Advent to acquire Engineering Materials business from DSM for a purchase price of around EUR 3.7 billion. Lanxess to transfer High Performance Materials business into joint venture. Lanxess to receive a payment of at least US$ 1.8 billion and a stake of up to 40 percent in the joint venture. Lanxess will use proceeds to reduce debt and plans to buy back shares. New joint venture with pioneering product portfolio and integrated value chain.
• In 2021, Asahi Kasei had established a group-wide data management platform called “DEEP” (Data Exploration and Exchange Pipeline) to accelerate Digital Transformation (DX) throughout the Asahi Kasei Group, and started its operation in April 2022. DEEP has established to manage and explore data of all businesses of Asahi Kasei, and is expected to make further contribution to the enhancement of management and businesses.
• In 2021, Ascend Performance Materials had announced plans to purchase a compounding facility in San Jose Iturbide, Mexico, growing its global footprint and expanding production capacity for high-performance engineered materials. The purchase agreement includes the assets of DM Color Mexicana, a joint venture between Dainichiseika and Mitsubishi Corp.

*Definition: The adipic acid market involves the production, trade, and sale of adipic acid as a chemical commodity globally. Adipic acid is an important organic compound that is primarily used in the manufacturing of nylon fibers, nylon 6,6 resins for the production of engineering plastics, polyurethanes, and various other industrial products. The key end-use industries driving the demand for adipic acid are automotive, electrical and electronics, consumer goods, textiles, etc. The major producers and suppliers of adipic acid actively participate in this established global market to cater to the growing requirements from downstream industries.

Market Segmentation

• Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Nylon 6, 6 Fiber
  • Nylon 6, 6 Resin
  • Polyurethanes
  • Others
•  End-use Industry Insights (Revenue, USD Bn, 2019 - 2031)
  • Automotive
  • Electrical & Electronics
  • Home Appliances
  • Textiles
  • FMCG
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Asahi Kasei Corporation
  • Ascend Performance Materials
  • BASF SE
  • Invista
  • Lanxess Ag
  • PetroChina Liaoyang Petrochemical
  • Radici Group
  • Rhodia
  • Shandong Haili Chemical Industry Company Ltd.
  • Shandong Hongye Chemical Company Ltd
  • DOMO Chemicals
  • Sumitomo Chemical Co., Ltd.
  • Solvay
  • Liaoyang Tianhua Chemical Co., Ltd
  • Meru Chem Pvt. Ltd
  • EMCO Dyestuff
  • JPM Pharma & Chemicals Pvt. Ltd.