Plastics are a wide array of semi-synthetic or synthetic organic solids that are transformed or molded into several useful products. Plastics are usually organic polymers derived from petrochemicals or sometimes occur naturally and have high molecular weights. The global plastic market is governed by the end user industry application. Owing to their low cost, ease of manufacture, availability of raw materials and flexibility of use, plastics have displaced many conventional materials including wood, paper, metal, ceramic, leather and glass in the majority of their uses. The increasing demand for sustainable and durable products in various end-user industries is driving demand for various plastics globally.
The growth of major end use industries (mainly packaging and construction) and versatile properties of plastics including better heat and pressure resistance, make them more applicable in various industries. Volatility prices of key raw materials coupled with growing environmental concerns regarding plastic disposal are expected to hinder market growth over the forecast period. To overcome such challenges, the industry has shifted its focus towards developing bio-based alternatives to conventional (petroleum-based) plastics.
Major plastics manufacturers have been forming JV and have been collaborating with biotechnology companies to synergize their functions to manufacture bio-based plastics. Moreover, upcoming technologies to recycle plastics for the manufacturing plastics into fabric for various end user products show immense opportunities for the plastic market. Major plastics manufacturers from the western hemisphere of the world have to focus on setting up manufacturing facilities in high-growth regions such as the Middle East and Asia Pacific. These regions along with providing consistent demand for plastics also help in reducing the overall cost of manufacturing.
Regulatory support in the form of tax benefits and financial incentives in countries such as China and India, to increase the FDI flow, has been a key factor in market development in Asia. In addition, these regions offer low labor cost which further helps in reducing the overall manufacturing cost for producers. However, this shift has resulted in an overcapacity of various plastics products which have affected their prices.
The report segments the plastic products according to the resin type namely polyethylene, polypropylene, PET, PVC, polystyrene and engineering thermoplastics among others. These products differ from each other in terms of the molecular arrangement and monomers involved in manufacturing them. The plastics products find wide applications ranging from manufacturing paper clips to space ship parts. The plastics can be used in various end-user industries including film/sheet, injection molding, pipes, construction, food & beverage packaging, automotive parts manufacture, textiles, electrical & electronics and consumer appliances among others. Polyethylene has been identified as the largest product segment globally accounting for 34.9% of the total plastics produced globally in 2013.
Increasing demand from various end user industries including film/sheet, injection molding, pipe, and food & beverage packaging is considered to be the key driver for polyethylene market globally. However, various environmental regulations and disposal norms are key challenges for polyethylene market. Polyethylene terephthalate (PET) is expected to be the fastest growing product segment over the next six years, growing at a CAGR of 8.5% from 2014 to 2020. Growing PET demand for carbonated soft drink packaging industry is expected to drive the demand for PET over the next several years.
Asia Pacific dominated the global market for plastics and accounted for 44.6% of total market volume in 2013. The growth of major end use industry, particularly in countries such as China and India, are expected to drive demand for plastics in the region. Europe and North America are fairly mature markets and are expected to grow at a relatively lower growth rates in comparison with other high growth regions.
North American and European plastics market are primarily driven by growing demand for high performance and environmental friendly plastics materials such as bio-based plastics and engineering thermoplastics. Central & South America is expected to be the fastest growing regional market for plastics at an estimated CAGR of 6.3% from 2014 to 2020. The growth of automobile and construction industry in Brazil and Argentina is expected to spur the demand for plastics in this region.
Key players in the plastic market include BASF SE, E. I. du Pont de Nemours and Company, Dow Chemicals and Saudi Basic Industries Corporation. Other companies in this market include LyondellBesell, ExxonMobil, Formosa Plastic, Total SA, Bayer Material Science, Indorama Corp., DAK Americas, M&G Chemicals, Octal Petrochem and Nan Ya Plastics.
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