Global polyolefin market has experienced a tremendous growth over recent years and is expected to witness significant expansion over the next seven years owing to growing consumption of finished plastics in both consumer and industrial sectors. These polymers are preferred over metallic and non metallic substitutes owing to its light weight, longer durability, resistance to physical and chemical attacks. There has been a huge push in the demand for recyclable containers and reducing greenhouse gas emissions. Shifting consumer preference towards convenient and eco friendly packaging in their everyday products has played a significant role in film packaging industry. This offers an opportunity to boost material and technology innovations and thus improve the production efficiency and expand its application scope.
Surging light weight high performance materials demand in automotive industry has positively impacted industry growth in past few years. Government legislations regarding optimising fuel efficiencies in automobiles have led to significant demand for light weight components. Rising disposable income and burgeoning volume of automobile usage has amplified the expansion of automotive sector globally. Stringent global laws for consumer goods packaging have further steered the polyolefin market penetration in packaging materials. Increasing polymeric films and sheet demand in wide host of industries including food & beverage packaging, injection molding, appliances is anticipated to positively affect industry expansion over the next seven years.
Rising environmental concerns coupled with stringent government legislations regarding use and disposal of synthetic polyolefins have led to development of bio-based products. Unstable natural gas and crude oil supplies along with uneven distribution of unconventional raw materials may hinder industry growth over the forecast period. While the production cost affects the hike in price of finished products, new feedstock and crackers are going to relax the raw material prices. Construction of numerous production facilities has been planned in emerging economies such as India, Thailand and Vietnam while the mature countries are focusing on sustainable and environment friendly solutions.
On the basis of products, polyolefins have been categorized into thermoplastic and elastomeric compounds. TPO include polyethylene (PE), polypropylene (PP), polymethylpentane (PMP). PE compounds have been further segmented into low density polyethylene (LDPE), linear low density polyethylene (LLDPE) and high density polyethylene (HDPE). TPO were the largest product segment in 2014 and are estimated to maintain their dominance in global industry over next seven years. LDPE and HDPE have attracted more investments in developing sustainable and high quality package films while other TPO owing to their light weight and high durability, have gained significant importance in the automotive industry. Business partnerships between BRIC nations and the major petrochemical suppliers are anticipated to play a significant strategic move in the polyolefin market and invite new entrants in the TPO industry. Besides the value chain integration, geopolitical factors also play an important role in driving forward the TPO demand. The governments are modifying the trade regulations which will amplify the global trade flow and hence accelerate supply chain process in the industry.
Aforementioned products find application in wide host of industries including films & sheet, blow molding, injection molding and tapes & fibers. Films & sheets were the major application segment in 2014 and are estimated to experience significant growth in near future owing to increasing demand in packaging, construction and trash bags. Injection molding is estimated to witness significant growth over the forecast period as compared to other application segments on account of increasing market penetration particularly in manufacturing automotive components and electrical & electronic appliances. High volumetric consumption of fiber & tapes in beverage and FMCG bottling is anticipated to strengthen market penetration in the segment over the next few years. Surging demand for green building materials and polymers is also estimated to create lucrative opportunities for industry participants in foreseeable future.
Asia Pacific was the largest consumer in 2014 and is estimated to witness above average growth rates both in terms of demand and production over the forecast period. Rapid industrialization coupled with establishment of various manufacturing facilities particularly in South Asian countries including Vietnam, Indonesia and Thailand. China and India were the leading polyolefins consumers and the trend is expected to continue in next seven years. North America and Europe are relatively mature markets and are estimated to project stagnant growth. BRIC nations are switching towards utilizing unconventional and bio-based resources. Industry in these regions has also been witnessing a shift towards adopting cheaper and efficient coal processing technologies which has further enhanced the production capabilities. Increasing R&D investments coupled with technological advancement and application specific product development offer significant amount of opportunities to be explored in the future.
Global polyolefins market is fragmented owing top presence of large number of local as well as regional manufacturers. Companies such as BASF and Dow Chemicals are majorly focused towards commercializing application specific bio-based products. Major companies operating in the industry include BASF, The Dow Chemical Co., LyondellBasell, SABIC, CNPC, Arkema, DuPont and Formosa Plastic Corp.
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