Intelligence Report: Business Shifts in the Global Catalytic Process Industries 2019-2025
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The Eighteenth Biennial Edition INTELLIGENCE REPORT: BUSINESS SHIFTS IN THE GLOBAL CATALYTIC PROCESS INDUSTRIES 2019-2025 STUDY PRESENTATION (Completed May 2020) THE CATALYST GROUP RESOURCES, INC. ● Gwynedd Office Park ● P.O. Box 680 ● Spring House, PA 19477 – USA –Phone: +1-215-628-4447 ● Fax: +1-215-628-2267 ● www.catalystgrp.com ● [email protected] INTELLIGENCE REPORT BUSINESS SHIFTS IN THE GLOBAL CATALYTIC PROCESS INDUSTRIES 2019-2025 …Leading-edge Analyses and Guidance for Opportunity Identification and Strategic Investment… Clients in the catalyst and catalytic process industries are facing unprecedented times! The current “medical crisis” from COVID- 19 is being followed by a “financial crisis” in which TCGR anticipates a U-shaped recession lasting to at least the 4QTR, 2020 and perhaps into the 1st QTR 2021. The net result of the global pandemic, the oil price/demand crisis, and the recent US-China trade disputes is a level of uncertainty not seen in generations. Nonetheless, the catalyst and licensing industries are resilient and responsive, continuing to serve a breadth of dynamic and high value-added applications. In this report, between 2019-2025, the overall industry is forecast to grow at +2.8% annually, with some segments flat or declining (e.g., liquid fuels) while others grow more substantially (e.g., syngas-derived chemicals). As it has in the past, catalysis will drive the progress and innovation across society, producing over $15 trillion annually, from gasoline to aspirin. It is therefore of vital strategic importance to your business development, opportunity identification and planning for success. TCGR has completed the 18th edition of our biennial update, “The Intelligence Report: Business Shifts in the Global Catalytic Process Industries, 2019-2025.” Considered the industry “gold standard,” TCGR’s report goes beyond statistics and benchmarks to provide competitive insight and analysis vital to end users in the refining, petrochemical/chemical, polymer, specialty/fine chemicals and environmental markets. This edition, completed in May 2020, builds on this tradition, as we have since the first biennial report was completed back in 1986! Several features characterize our outlook: for the first time in decades, the chemicals/petrochemicals sector is set to lead growth, at 4.2%/yr through 2025. It outpaces the polymerization sector at 3.5%/yr and the refining sector at 3.1%/yr, with the environmental sector lagging at 1.4%/yr. Chemicals/petrochemicals benefit from the “oil-to-chemicals” movement while refining suffers from reduced transportation fuel demand. Polymers continue to grow in value-added roles (but less so in packaging, where recycling has an impact) and environmental is restricted by the penetration of EVs, among other factors. Among the most significant events noted for the industry over the forecast period to 2025 are: The refining industry has been triply impacted by COVID-19. With workplace lockdowns, the demand for transportation fuels plunged and oil prices/margins contracted, further compounded by global automotive industry struggles in the shorter term. We forecast automobile sales will not reach 2018 levels again until 2022/23, softening demand for mobile autocatalysts as well as fuels (depending upon region). The chemicals industry will fare much better, although growth in different segments will be uneven, driving refiners towards more chemicals/petrochemicals production. Bright spots will be syngas, as the demand for hydrogen will be very strong; others will be more spotty. Despite the surge in the interest of recycling of plastics in a circular economy, and robustly so in PET and styrenics, the solutions needed for mixed polyolefins that are economic (besides mechanical recycling) are more complicated and will take several years to be optimized. During the interim, plastics will continue to be a growth segment. The environmental stationary pollution control market will continue to grow globally. The dip in mobile automotive demand will impact catalyst demand, but tighter regulations will increase the demand for combined particulate filters (DPFs) which will offset some of the challenges. We anticipate further consolidation during this event-driven recession, which will likely be deeper than the fiscal-driven recession of 2008/09. Companies that can adapt, as well as innovate, will fare the best in the coming years. As always, TCGR’s 2020 edition of The Intelligence Report provides its clients with deep insight for planning and action. 1 The Intelligence Report: Business Shifts in the Global Catalytic Process Industries, 2019-2025 18th Biennial Edition The future of competitiveness in the catalytic process industries in 2020 (and beyond) depends on difficult, yet critical, decisions related to technology position and market participation. The industry has yielded gains from strategic restructurings made back in 2008‐09, but focused and dedicated approaches in 2020 and beyond will be required r fo success. The following are key drivers as we proceed through the 2020‐2025 forecast period: The nature and duration of the economic slowdown, which began in early 2020, will determine the impacts on specific industries/end uses Some rationalization/consolidation is justified in catalyst The Catalyst Industry’s “Gold production/supply and process licensing. Key factors ‐ like Standard” degree of integration, market share, and production costs ‐ determine both targets and acquirers The Intelligence Report deliverables, in study and slide formats, provide new business and technology The movement towards “oil‐to‐chemicals” (O‐t‐C) increases perspectives, including: and intensifies, with competitive implications for both leaders and laggards as well as those producing fuels vs. those into Comprehensive, concise and detailed industry aromatics/olefins statistics on catalyst volumes and values, including The utilization of abundant natural gas (NG) and natural gas forecasts liquids (NGLs) as fuels and feedstocks expand the advantage Producer‐ and user‐specific developments in over less competitive sources of energy and olefins/aromatics production and technology, including alliances, (e.g., coal, naphtha, etc.) ventures and acquisitions/divestitures The role to be played by Industry 4.0, the Industrial Internet of Covering the refining, petrochemical/chemical, Things (IIoT), and artificial intelligence (AI) in industry polymer and environmental markets operations and gplannin increases Identification of new growth opportunities across Climate change impacts, including circularity and the value chain sustainability, increasingly affect catalyst industry applications Assessment of geographical, technological and and industry participants (see “Special Feature” section on the competitive gaps following page) Analysis and recommendations leading to specific actionable items The way that catalyst suppliers and process technology licensors The combined deliverables of a detailed statistical address these changes, and which ones strategically position reference document, along with an (optional) “Exec themselves for the future, are critical considerations addressed in Deck” of critical findings via PPT slides, TCGR’s 2020 the 2020 edition of The Intelligence Report. These are challenging edition of The Intelligence Report are invaluable for times for all industry participants ‐ visionary thinking is required. TCGR achieving technical, market, competitive and strategic injects some interesting dynamics for0 202 and beyond via this advantage! biennial edition! The “Intelligence Report” has evolved from documenting technological and commercial progress into a tool for identifying strategic business opportunities and providing major investment guidance… Back by Popular Demand in 2020! In order to increase the report’s utility to senior management and executives, TCGR continues to offer a companion deliverable designed to complement the report contents, highlighting the key findings and making them more actionable. In a set of PowerPoint slides entitled, “Intelligence Report 2020 ‐ Exec Deck,” TCGR has extracted the critical statistical data as well as technical, market and competitive/strategic insights, and deliver a presentation‐style document. TCGR’s team of experts is then available to present these to subscriber audiences or they can be used to generate internal documents for strategic/competitive pursuits. The “Exec Deck”, and resultant Q&A during the presentation sessions, provides additional subscriber‐specific value 2 Intelligence Report - 2020 Special Feature Section In order to add value/perspective(s) beyond industry statistics and VII. Special Feature: "Climate Change Impacts on the commentary, a Special Feature section (Section VII; see TofC Catalytic Process Industries” beginning on page 4) addresses the impacts of climate change on the A. The Climate Drivers for Innovation in Catalysis catalytic process industries. These go beyond the catalysts B. Major Applications where Technology Advancements themselves to include the breadth of products that they make, and are Required and/or Underway (e.g., fuels, energy the industry participants affected. What is the fate of liquid carrier chemicals, polymer re‐use/recycling) transportation fuels and the routes being used to make them, from C. Catalyst/Process Technology Developments by Majors established to developing pathways which are non‐CO2 generating and Start‐Ups: Status and Outlook (with LCAs and TRLs) (e.g., electro/photo‐catalytic