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The outbreak of COVID-19 significantly increased the demand for
biocides such as sanitation and disinfection products for hands and
surfaces. Some estimates anticipate demand increases as high as
600% for 2020. With the long-term prospects for coronavirus
unclear, the biocide growth rate for the 2019 to 2025 period may be
as much as 17% (CAGR). This demand is good news for major suppliers
of hand and surface sanitizers, including 3M, Reckitt Benckiser,
Gojo Industries, Henkel, Himalaya Global Holdings, Unilever, CVS
Health, Ecolab, Procter & Gamble, and S.C. Johnson &
Son.
The biocides market is split into two categories: products
needed to combat COVID-19 and products used in areas indirectly
influenced by the outbreak. The impact of COVID-19 on these
products varied widely (see Table).
Disinfecting hands
Hand disinfection is mostly achieved with alcohols. Frequently
used are ethanol or isopropanol (alone or in combination).
N-propanol is the fastest acting disinfectant alcohol, but it is
used less often than ethanol or isopropanol.
In 2020, total global production and consumption of isopropanol
is expected to be about 2.1 million tons, about 40 % were
pharmaceutical, cosmetic and electronic grade in the major regions.
The major producers of isopropanol are Shell, ExxonMobil, INEOS,
Kellin Chemicals, Dow Chemical, and LG Chem. Together these firms
supply about 50% to 55% of the global output. ExxonMobil increased
its production of isopropanol by 3,000 tons per month in April
2020, boosting annual production by 10% at its Baton Rouge,
Louisiana (USA) plant. In Germany, Oxea tripled its n-propanol
output in the second quarter of 2020. Expanding the production of
n-propanol freed large quantities of ethanol - that otherwise would
have been used as solvent for the printing industry - for the
manufacturing of hand sanitizer.
While n-propanol and isopropanol are produced by chemical
synthesis, ethanol is largely produced by fermentation. Globally
85% of ethanol is used as a green fuel for combustion engines.
Because the demand for transportation was reduced by the epidemic,
manufacturers had enough capacity available to satisfy the demand
for ethanol-based sanitizers. Ethanol producers in all regions
donated large quantities of ethanol and in many cases produced
disinfectant themselves.
As the demand for hand disinfectants boomed, products rapidly
sold out - but this was not caused by a shortage in the alcohols
themselves. Instead, a lack of containers, filling capacity, and
logistics problems caused the stock-outs. To address this shortage,
companies that produce or store larger quantities of alcohols
started producing hand disinfectant for their regions. BASF began
manufacturing disinfectants in Germany and luxury brands like LVMH
stepped in to alleviate shortages in France.
Sanitizing surfaces
Surface cleaning is needed to sanitize items such as medical
instruments, vehicles, rooms, buildings, or streets. Commonly used
surface disinfectants include peroxides, halogen compounds, and
quaternary ammonium compounds.
The type of biocide to be applied depends on how sensitive the
surfaces are. Stables or vehicles can be disinfected with peracetic
acid, while hospitals or other inhabited buildings are cleaned with
hydrogen peroxide - often in combination with silver salts. About 6
million tons of hydrogen peroxide are consumed every year. All
peroxide agents must be handled by professionals. Major global
producers are Evonik Industries, Solvay, Kemira Oyj, Eka (Nouryon),
and Mitsubishi Gas Chemical.
We estimate that 3% to 5% of the produced hydrogen peroxide is
used as a sanitizer or for synthesis of peroxides used as
sanitizers. Dow and Solvay donated 600 tons of hydrogen peroxide to
the government of Thailand - enough to treat 300 million square
meters of risk areas. Yet monthly global trade patterns of
countries with substantial monthly imports or exports of hydrogen
peroxide show no change as compared to the pre-COVID-19 period.
Volumes used for disinfection are too small to impact the overall
market. Any lag in hydrogen peroxide availability was more likely
caused by production stops in the pulp and paper market, which
affected packaging.
Another peroxide compound widely used in hospital disinfection
is potassium peroxymonosulfate. Lanxess, one of the major producers
of this product, expanded its production significantly and donated
several tons of product to hospitals in China and Europe. Halogen
compounds like sodium hypochlorite - commonly known as bleach -
have long been used as sanitizers in the public and private space.
Sodium hypochlorite is relatively cheap, effective, and easily
available. Disadvantages are its smell and limited storage time. A
huge number of small- and mid-sized producers are present in all
regions. Sodium hypochlorite is sold as an aqueous solution with an
average chlorine content of 4% to 6 %. Global consumption is about
2.2 million tons (chlorine equivalents), with households
representing 35% of total use. About 50% of the consumption is in
North America and Western Europe. A general drawback of halogen
compounds and peroxides is their potential to corrode metallic
surfaces.
Because global production capacity is about 50% higher than
consumption, manufacturers had no problem satisfying additional
demand generated by COVID-19. Producers and resellers of household
bleach reported no supply shortages from hypochlorite producers.
The empty supermarket bleach shelfs experienced as the virus
started to spread were caused by bottlenecks in logistics, rather
than product supply. Monthly trade patterns of countries with
significant imports or exports of hypochlorite bleach show no
deviation from normal quantities or prices through April and May of
2020. Interestingly, the actual production capacity for
hypochlorite bleach is even higher than reported. Reported capacity
refers only to marketable product and does not include the capacity
that all chlor-alkali producers need to have installed to absorb
chlorine gas in case of a technical issue. Quaternary ammonium
compounds (quats) can kill many fungi, bacteria, and viruses. The
antimicrobial properties of quats have been known for more than 100
years . Their chemical structure can be easily altered, making it
possible to maximize their antimicrobial properties. Two types of
quats prevail as disinfectants: alkyldimethylbenzylammonium
chloride (ADBAC) and dialkyldimethylammonium chloride (DADM). The
optimum chain length for ABBAC is in the C12 to C16 range, while
DADM has an optimum between C8 and C10. The vast majority of
commercial products are within these ranges.
Quats in general are surfactants. Their interaction with the
surface of viruses can lead to destruction of the outer hull of the
virus or it can form a micelle around the virus. In both cases, the
virus is deactivated. Quats are very effective in concentrations as
low 30 parts per million for enveloped viruses. They are popular as
disinfectants because they are non-corrosive, have a good human
toxicology profile, and combat a wide range of microorganisms. They
are the preferred disinfectants in medical facilities. Globally
about 130,000 tons of quats were consumed as disinfectants or
preservatives in 2019. Major producers include Lonza Group,
Nouryon, Stepan, and Thor Specialties.
In February 2020, quat producers were challenged by
unprecedented demand for their products. At peak times, production
capacities were at their limit. Many plants that produced
intermediates for biocides were closed. In addition, a lack of
available transportation hindered the delivery of both raw
materials and finished products.
Achieving a new normal
Helping out with the production of formulated disinfectants on
short notice was the best contribution the chemical industry could
make to the world's battle with COVID-19. It seems unlikely,
however, that this short-lived business will make up for the losses
the industry suffered as a result of the coronavirus-driven
economic downturn. Assuming that there is no second wave of
COVID-19, we expect sales in the biocide market to reach their 2019
levels again in the second half of 2021. Industry sources
anticipate that the biocides used in disinfection will normalize at
a level about 5% to 15% above the pre-coronavirus consumption.
For more information on how COVID-19 is impacting the specialty
chemicals market take a look at: