US corrosion inhibitors demand to increase 4.4% annually through the year 2006. (News Release).

Demand for corrosion inhibitors in the US is forecast to increase 4.4 percent per year to $1.6 billion in 2006. Higher-value and specialty formulations will continue to replace low-cost commodity chemicals in most markets. These newer products typically offer improved environmental and health

profiles and comparable or superior performance (often at lower loadings) compared to conventional formulations. However, long term growth for corrosion inhibitors will be threatened by competition from nonchemical methods of treatment, especially plastics and corrosion resistant metals. These and other trends are presented in Corrosion Inhibitors, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

In water treatment applications, which accounted for approximately 70 percent of 2001 demand, inhibitors will benefit from the increasing use of recycled water due in part to tightening wastewater effluent standards in many industries. The majority of high-growth markets are in water treatment applications, including petroleum refining, metals processing, pulp and paper production, and chemical processing. However, gains for water treatment inhibitors will be held in check by the increasing use of noncorrosive materials such as plastics and corrosion resistant metals in the manufacture of industrial equipment.

Overall, growth for product additives will be less robust than for water treatment chemicals since these applications are more dependent on trends in specific end-use markets. For example, fuel additive applications will experience slow growth through 2006 due to such changes in gasoline formulation as the trend toward cleaner fuels and the prospective ban of certain fuel oxygenates, both of which will restrain corrosion inhibitor demand. However, paint and coating additives will experience above-average growth due to the ongoing replacement of solvent-based paints with water-based types, which require increased inhibitor loadings and higher-value inhibitor types.

The market for corrosion inhibitors will also benefit from changes in product formulations, including increased demand for specialty blends and multi-functional products (e.g., combination corrosion and scale inhibitors). Gains will also arise for products that mitigate health and environmental pollution effects, improve end-use product characteristics, and reduce microbiologically induced corrosion. Organic-based products will remain the largest type in value terms, although molybdates and silicates will experience faster growth. Organics will benefit from the use of amines in volatile corrosion inhibitors (VCIs), which are becoming increasingly common.

CORROSION INHIBITOR DEMAND
(million dollars)

                                                  % Annual Growth
Item                         1996   2001   2006    01/96   06/01

Corrosion Inhibitor Demand   1076   1268   1570     3.3     4.4
  Petroleum Refining          267    330    401     4.3     4.0
  Chemicals                   211    230    305     1.7     5.8
  Utilities                   190    220    260     3.0     3.4
  Oil & Gas Production        140    165    190     3.3     2.9
  Pulp & Paper                110    128    165     3.1     5.2
  Metals                       85    100    130     3.3     5.4
  Cement & Concrete            20     30     36     8.4     3.7
  Other                        53     65     83     4.2     5.0

[c] 2002 Freedonia Group, Inc.

Corrosion Inhibitors (published 06/2002, 217 pages) is available for $3,700 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 440.646.0484 or e-mail pr@freedoniagroup.com. Information may also be obtained through www.freedoniagroup.com.