Succinic Acid: From a Promising Building Block to a Slow Seller - What Will a Realistic Future Market Look Like?
The research on succinic acid shows a clear mismatch between the supply and demand estimates. This was already visible in last year's market report and the trend has not changed. The interest for bio-based succinic acid grew after its production was forecasted to become cost competitive with fossil-based succinic acid, inspiring a lot of hope for such a business case in the last few years. However, these projections were based on crude oil price assumptions that did not come true, with the oil price staying below the projected levels. The market for fossil-based succinic acid always remained small with a primary focus on specialty chemicals that now can be served via bio-based succinic acid. This seems to stay the same. Also the expected rise in demand for 1,4-butanediol, which was considered a key market for bio-based succinic acid, did not become reality due to the same price considerations. It is not expected that any production units for 1,4-butanediol from bio-based succinic acid will become commercial before 2023.
This is the clear reason why several companies had to close down their operations to produce bio-based succinic acid. The shutdown also caused a rise in price levels of succinic acid.
On the other hand, compared to the past, today the production of succinic acid for niche applications and specialities is strongly focused on the bio-based routes through the fermentation of glucose from bio-based feedstock and downstream purification of the raw acid. The first commercial fermentation facilities have been running since 2012 and the production is rising on a smaller level than expected but on higher prices. The current research looks into different applications, like the bio-based polymer polybutylene succinate (PBS) and coatings that will be the main drivers for succinic acid growth until the end of 2023. However, the succinic acid market is expected to be confined to specialty applications at least until the end of 2023. Larger commodity markets will strongly depend on the crude oil price development and the market report highlights these potential developments.
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