Published March 2016
Cellulose ethers are polymers produced by the chemical modification of cellulose. The cellulose ethers covered in this report include carboxymethylcellulose (CMC), methylcellulose (MC) and derivatives, hydroxyethylcellulose (HEC) and derivatives, hydroxylpropyl cellulose (HPC), and ethylcellulose (EC).
Cellulose ethers perform a variety of functions such as thickening, binding, water retention, soil antiredeposition, and acting as a protective colloid in many industries including food, pharmaceuticals and personal care products, oil field chemicals, construction, paper, adhesives, and textiles. They compete with each other in select applications and with synthetic water-soluble polymers (polyvinyl alcohol, polyurethane associative thickeners, polyacrylates) and natural water-soluble polymers (xanthan, carageenan, locust bean gum). The specific product used is determined by price/performance trade-offs, availability, and the ability to change formulations easily, depending on price/performance.
The following pie chart shows world consumption of cellulose ethers:
The market for CMC is divided into technical (crude), semipurified, and high-purity grades. The largest end uses are detergents (which consume technical CMC), food, and oil field applications.
Applications such as food, personal care, and pharmaceuticals are less susceptible to product substitution because of the cost of reformulating high-purity ingredients. Since the last report was published in 2012 there has been a dramatic fall in oil prices, with a subsequent decrease in rig activity in the oil sector. The impact is reflected in the lower growth expectations seen in this application for the forecast period, especially in the United States.
The customer base in some of the larger applications (i.e., detergents, surface coatings, building products, and oil field applications) is fairly concentrated, with high-volume end users. However, these applications account for less than half of the total market for cellulose ethers; the remainder of the market is highly fragmented. Cellulose ethers typically represent a small fraction of a consumer’s total raw material purchases and there appears to be no desire for customers to integrate backward to cellulose ether manufacture.
CMC is the major cellulose ether consumed worldwide, with slightly over half of the total volume consumed. Methylcellulose and derivatives represent about 30% by volume, while hydroxyethylcellulose and derivatives account for about 12% by volume.
The technical-grade market for CMC is dominated by many Chinese producers. In purified CMC, CP Kelco is dominant with a 32% share, followed by Ashland with a 25% share of the global market.
The production of other cellulose ethers is much more concentrated. Three producers account for more than 50% of world capacity. China has numerous medium-sized local producers, the total capacity of which is now comparable with total capacity in Western Europe.
Opportunities for growth in demand for cellulose ethers continue to be found in the food and personal care industry. The growing demand for healthier foods, with the reduction of fats, meats, and potential allergens such as gluten, provide opportunities for cellulose ethers that provide an alternative without compromising taste or texture.
An overall average growth rate of about 3% per year is expected for all cellulose ether products during 2015–20. In Asia, the lowest growth is expected in Japan, while China and the rest of Asia will lead global growth. The regions with the largest consumption currently—Europe and China—will grow at about 1.5% and 4.5% on an average annual basis, respectively. North America and South America will grow faster than Europe, at a rate of 2.5% per year.