Europe Plastic Compounding Market Size Share & Trend Analysis Report, By Product (Polyethylene, PET, Polypropylene), By Application (Automotive, Construction, Electrical & Electronics, Packaging), And Segment Forecasts, 2019 - 2025

Industry Insights

The Europe plastic compounding market size was valued at USD 12.5 billion in 2018 and is driven by increasing application in automotive and consumer appliances manufacturing. Polyurethane is most widely used as foam cushioning material in seats and insulation panels in automotive manufacturing.

Plastic compounding is an important process that determines the final product quality and various characteristics or attributes of the end product. In compounding, different materials are assorted, melted, and then granulated. The granules are processed into a finished or semi-finished part, which is durable and flexible.

Molding or extruding methods are employed for the processing of granules. The final product and its quality are based on the blend of materials used in the initial stage. Its use in Europe is regulated by stringent rules and guidelines regarding plastic waste disposal by European Union (EU). The local governments are also developing initiatives for recycling PET and PE.

The U.K., led by the automotive industry, is the second-largest market in Europe. The construction industry also holds a significant market share of around 15.0% in terms of revenue in the U.K. The country’s construction industry is aided by recently sanctioned government budgets, coupled with foreign investments in the region to re-engineer the sector.

As per the government, the U.K. is estimated to showcase up to 200,000 new houses under the HS2 housing project. The building and construction industry demands plastic compounds for various end-uses such as manufacturing ducts and pipes, floor and wall coverings, linings and fitted furniture, and insulations.

Increasing automotive production and subsequent rise in plastic consumption in automotive component fabrication as a result of regulatory policies are expected to drive the market in Europe over the forecast period. Polyamide (PA) compounds, particularly PA6 and PA66, are being widely used in automotive applications that comprise pedal boxes engine covers, radiator tanks, and several other components.

European manufacturers are experiencing more difficulties due to the high costs of natural gas and electricity. Gas prices in the region remain around 2.5 times higher than those in the U.S. The region requires a significant amount of oil imports to meet its local demand, which is adding to the final product cost. High prices of power raise the cost of manufacturing of all chemicals, but a few see a particularly significant increase downstream.

Application Insights

Increasing the integration of electronics into automobiles, coupled with rising demand for wearable devices among youth, is driving demand for plastic compounds in the region. The automotive industry has witnessed rising sales of passenger cars and light commercial vehicles. Polypropylene compounds are used to reduce the overall vehicle weight and increase fuel economy. Plastic compounds are also used extensively in the interiors of automobiles, further driving demand.

The construction industry in Europe has depicted a significant growth post-2013 and is driven by economic recovery and a steady rise in per capita disposable income. Plastic compounds are widely used for dome lights, glazing, and sound walls. Its impact strength, moldability, and availability in optically transparent grades have been instrumental in penetrating construction applications.

PVC is the most preferred material in the construction industry and has successfully replaced traditional materials such as metal, wood, clay, and concrete. It is used in constructing components such as window frames, pipes, and roofing foils owing to its cheap cost and high resistance. Government initiatives to reduce real estate prices and recover housing permits add to the economic stability of the region. These initiatives have largely benefited the construction industry, thereby fueling the Europe plastic compounding market.

Product Insights

Polypropylene compounds dominate the European market owing to their application in core manufacturing sectors such as automotive, construction and electrical and electronics. Rapid growth in the regional automotive industry is the primary factor behind growing demand for polypropylene compounds.

Widespread acceptance of these products can be attributed to their cost-effectiveness, good chemical resistance, excellent mechanical properties, and moldability. Automotive sales in the European Union Free Trade Agreement (EU28) countries presented an increase by 8.2% in 2017 and the European Union reflected a rise of 8.4% in 2017.

PET is the most commonly used product in Europe as well as globally and has been witnessing a rapidly increasing demand. These compounds are used across automotive, packaging, textiles, and other industries. Its rising demand has led various leading companies to develop methods to recycle PET, thus addressing issues pertaining to its disposal. Development of bio-based PET is expected to provide the much-needed solution for internal substitution.

Regional Insights

Germany leads the overall market in terms of revenue and volume. Germany has a thriving plastics industry and has set international standards for its manufacturing methods. The country has several production facilities and a well-developed industrial sector; it also houses one of the biggest automotive manufacturing hubs in Europe. The construction, automotive, packaging, and mechanical engineering sectors in Germany are focused on developing new and innovative products.

Regional growth is driven by the widespread usage of plastic compounds in the industrial machinery, construction, and automotive industries. Europe has also scrutinized the grades and types of plastic compounds being used across end-use industries. Hence, compounders in the region are investing heavily to capture potential markets and replace heavier materials. Metal components such as machinery panels, covers, and hoods are being substituted with strong and durable plastic materials. Such replacements are prominent in the packaging industry as well. Packaging is an emerging industry for plastic compounders in Europe and reflects a total of 50.0% of all products being packaged in plastic containers or boxes.

Europe Plastic Compounding Market Share Insights

Industry participants are majorly focusing on the development of new technologies of recycling plastics while maintaining crucial European standards. Formulators in the region have also been enhancing their product portfolio and focusing majorly on recycled plastics to comply with regulations laid down by governments of various countries and other concerned regulatory bodies. Furthermore, companies are focusing on the usage of organic feedstock in order to create bio-based plastics as a sustainable solution.

Some of the key industry participants are BASF SE, Dow Chemical Co., SABIC, LyondellBasell Industries, and Covestro. Other prominent manufacturers include Asahi Kasei Plastics, Eurostar Engineering Plastics, Lanxess AG, Solvay, and PolyOne.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at regional and country levels and provides an analysis of latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the Europe plastic compounding market report on the basis of product, application, and country:

• Product Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

  • Polyethylene (PE)

  • Polypropylene (PP)

  • Thermoplastic Vulcanizate (TPV)

  • Thermoplastic Polyolefin (TPO)

  • Polyvinyl Chloride (PVC)

  • Polystyrene

  • Polyethylene Terephthalate (PET)

  • Polybutylene Terephthalate (PBT)

  • Polyamide

  • Polycarbonate

  • Acrylonitrile Butadiene Styrene

  • Others

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

  • Automotive

  • Construction

  • Electrical & Electronics

  • Packaging

  • Consumer Goods

  • Industrial Machinery

  • Medical Devices

  • Optical Media

  • Appliances

  • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

  • Europe

    • Austria

    • The U.K.

    • France

    • Germany

    • Switzerland

    • Czech Republic

    • Hungary