Plastic Compounding Market Size, Share & Trends Analysis Report By Product (PE, PP, PET, TPV, TPO, PVC, PS, PBT, PA, PC, ABS), By Application (Automotive, Electrical & Electronics), By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global plastic compounding market size was valued at USD 60.35 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 7.4% from 2022 to 2030. Increasing substitution of natural rubber, wood, metals, glass, and concrete for plastic is expected to fuel the market growth. The demand for plastic is rising due to its use in various industrial applications on account of its ability to form desired shapes and easy molding.

Plastic fittings are considered to be very easy to install as compared to metal or wood fittings. These fittings are available in a wide range of color combinations, which adds to their aesthetic appeal. Moreover, plastic fittings can be sealed very tightly, thus creating a barrier for external unwanted factors like dust or water. The properties of plastic compounds can drive the market in the coming years. Plastic compounding involves an elaborate process with various stages such as determining additives ratio, high-speed mixing via twin-screw extruders, melt mixing, and cooling, before final pellet cutting and packaging.

Polyethylene terephthalate (PET) is expected to be one of the fastest-growing segments in the U.S. plastics market due to its high demand from the packaging sector. PET is mostly used in the production of bottles and holds a significant market share in the plastics industry. Most PET processors in the U.S. are increasingly focusing on implementing Good Manufacturing Practices (GMPs) in an attempt to optimally utilize available resources, conserve resources, and increase production efficiency. These initiatives are further expected to drive the market for PET over the forecast period.

There is a diverse range of products available, depending on the additives and fillers integrated while processing the polymers including antioxidants, processing aids, colorants, wear-resistant, blowing agents, lubricants, fillers and reinforcements, antistatic agents, slip/anti-slip agents, anti-block agents, flame retardants, light stabilizers, impact modifiers, and cross-linking agents.

Europe emerged as the second-largest market in 2021 owing to the high demand from the automotive, electrical and electronics, and construction sectors. Germany was the leading plastic producer in Europe in 2020. The country is self-sufficient in plastic production with an adequate number of plants and production capacity required to fulfill local demand. Moreover, the country supplies Polyethylene Terephthalate (PET), Polyvinyl Chloride (PVC), and other products to neighboring countries due to the high quality and large production base. The country is also recycling a significant amount of waste plastic into various products, such as fibers, sheets, and film. Germany is setting the international standards as a key plastic industry located in Europe, with the country’s leading-edge network of chemical parks, industrial infrastructure, and unique cluster concept, providing industry players for accessing all the parts of the plastics industry value chain swiftly.

Future supply and demand changes are also expected to keep the prices of plastics very volatile. Most raw materials are produced through downstream processes of petrochemicals. Volatility in crude oil prices is due to political instability, supply and demand imbalances, and seasonal variations. Additionally, the market is highly integrated from raw material procurement to distribution channels. Major companies have established supply partnerships to reduce overall production costs. Such factors are anticipated to have a large impact on the prices of plastic compounding.

The depleting crude oil reserves and environmental concerns due to the usage of petrochemical polymers have propelled the demand for bio-based products. Government restrictions on the consumption of polymers derived from petrochemicals in different end-use industries are expected to further incentivize the production of bio-based polymers. Polymers derived through bio-based sources such as Polylactic Acid (PLA), Polybutylene Succinate (PBS), and Polyhydroxyalanote (PHA) show remarkable biodegradability that their petrochemical-derived counterparts lack. These products are widely accepted in biomedical and agricultural applications.

Product Insights

The polypropylene segment led the market and accounted for more than 25.0% share of the global revenue in 2021. Its compounds are largely used in automotive applications owing to the high impact resistance and serviceability. Economic growth in Asian and Latin American markets has propelled growth in the automotive sector both in terms of vehicle sales and domestic production. Considering ever-increasing automotive production, along with regulatory trends compelling manufacturers to reduce vehicular weight and improve fuel efficiency, plastic consumption in automotive applications shall rise considerably over the forecast period. It has good fatigue resistance and better chemical and temperature resistance. These factors have made PP a popular material for multiple applications in developed economies and emerging economies alike.

Polyethylene compounds are widely used in various industries such as automotive, construction, electrical and electronics, and packaging. PE is an integral material for the packaging industry. Construction is the leading application segment for polyethylene compounds with a significant share in the global market. Moreover, rising demand for packaged food, bottles for fruit juices and milk, caps for food packaging, trays, drums, and other liquid food packaging owing to restrictions on the movement of people to reduce the spread of COVID 19 across the world is expected to drive the demand for polyethylene compounds.

Increasing construction spending in Asia, the Middle East, and Latin America is expected to provide growth opportunities for PVC compounds, considering relatively relaxed regulatory intervention regarding the presence of plastics in building materials. The recent trend of developing PVC through bio-based sources has been successful, such as the recently introduced Dow Chemical’s Ecolibrium plasticizer shall have a positive influence on PVC compound growth over the forecast period.

Application Insights

The automotive segment accounted for more than 20.0% share of the overall revenue in 2021. Increasing incorporation of plastics, as opposed to metals and alloys in automotive components, has been a major factor fueling the segment growth. Over the recent past, there has been a considerable rise in automotive production, which is largely driven by the growth of the industry and the manufacturing landscape of emerging markets. China, India, and Brazil are the fastest-growing economies and are also the major production hubs for automobiles. This trend is expected to continue in the future, thus driving the demand for plastic compounds.

The growth of the electrical and electronics industry in Asia Pacific owing to the emergence of small-scale electrical component manufacturers and electronic goods producers and a versatile manufacturing landscape. Moreover, the support from the government, the availability of raw materials, and cheap labor are expected to augment the growth of the segment.

High consumerism in major developed countries like the U.S., China, Germany, India, and Brazil drives the demand for plastic compounding in the packaging industry. Various regulatory authorities have established standards for packaging materials used in food contact applications. Polypropylene compounding provides a cost-effective packaging alternative that increases impact clarity, flexibility, strength, and process efficiency. The high demand for polyethylene in the packaging industry has fueled the growth of the market.

Asian markets have been registering an above-average industrial output over the recent past when compared to their Western counterparts. Companies based in the western markets are gradually increasing their presence in Asia to capitalize on growth prospects. In addition, a favorable environment in Asia that promotes small-scale enterprises to develop and government-driven tax incentives for foreign corporations are expected to increase the sales of industrial machinery and equipment. Companies manufacturing the machinery tend to channel their businesses locally, i.e., establishing manufacturing units closer to their customer bases. These factors are likely to increase the consumption of plastic compounds in industrial machinery over the forecast period.

The others application segment includes furniture, fabrics, footwear, displays, defense, aerospace, marine, and bookbinding. Polyethylene accounted for a significant revenue share in 2021. Polyethylene (PE), as a resin, is a versatile polymer with its usage ranging across various plastic application segments. As a compound, its usage is increasing in toys, book covers, bulletproof vests (linear polyethylene compounds), and adhesion tapes

Regional Insights

Asia Pacific dominated the market and accounted for over 40.0% share of the global revenue in 2021. The growth is favored by the economic environment and the emergence of plastic manufacturers. The growing manufacturing sector shall drive the demand from the automotive, industrial machinery, construction, packaging, and electrical and electronics industries in the region. It is the largest producer and consumer of automobiles, consumer goods, and packaging materials that paved a way for the regional market growth. Most of the producers are involved in roughly one of the segments of the plastics industry value chain. APAC is also one of the largest consumers and producers of electrical and electronic products, such as equipment and wires, which further fuels the regional demand.

Rapid infrastructure development in the U.S. and Mexico is predicted to augment product demand in the forecast period. Government regulations that support the recovery of the housing sector are predicted to have a positive impact on the construction market. Reconstruction activities in the U.S., coupled with infrastructure development in Canada and Mexico as a result of rapid industrialization, are expected to boost the market growth in North America over the forecast period. However, the growing number of positive COVID-19 cases in the region has caused a decline in demand and limited cross-border trade, thereby negatively impacting the market growth.

Europe is likely to remain a saturated market with slightly positive aspects in Central and Eastern European countries. Various federal level agencies and others such as the European Chemicals Agency (ECHA) and the European Commission have characterized stringent environmental regulations in Europe with regard to the production and consumption of the materials. These regulatory policies however challenging might they be for growth, are in a way expected to aid industrial development as they tend to push manufacturers to optimize processes and develop sustainable technologies and products.

Expanding construction sector, majorly in Qatar and the UAE, owing to advanced real estate regulatory framework, increasing number of infrastructure projects, and economic recovery is expected to drive the demand for the product. Various factors including rising tourism activities, favorable macroeconomics, and positive demographics are likely to promote growth in the construction industry.

Key Companies & Market Share Insights

The global market is highly fragmented with over 60.0% share occupied by Small and Medium Enterprises (SMEs). Companies are rapidly expanding their production capabilities to consolidate their market position. The industry has witnessed significant capacity expansions in China with the emergence of standalone independent compounders. Unlike major end-use corporations such as automotive manufacturers and Original Equipment Manufacturers (OEMs) who establish strategic agreements with compounders or extend their capabilities towards compounding, Chinese compounders cater to a large pool of medium enterprises.

For instance, in October 2021, Dow, Inc. announced investment programs to advance circular plastics. These advancements will help prevent plastic waste, reduce greenhouse gas emissions, and provide recycled plastics that showcase similar properties as virgin plastics. These advancements enable the company to initiate the supply of circular plastics at the start of 2022. Some prominent players in the global plastic compounding market include:

• BASF SE

• LyondellBasell Industries Holdings B.V.

• Dow, Inc.

• DuPont

• SABIC

• RTP Company

• S&E Specialty Polymers, LLC (Aurora Plastics)

• Asahi Kasei Corporation

• Covestro AG

• Washington Penn

• Eurostar Engineering Plastics (EEP)

• KURARAY CO., LTD.

• TEIJIN LIMITED

• Evonik Industries AG

• Dyneon GmbH & Co KG

Plastic Compounding Market Report Scope

Segments Covered in the Report

This report forecasts revenue and volume growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2019 to 2030. For this study, Grand View Research has segmented the global plastic compounding market report based on product, application, and region:

• Product Outlook (Volume, Kilotons, Revenue, USD Million, 2019 - 2030)

  • Polyethylene (PE)

  • Polypropylene (PP)

  • Thermoplastic Vulcanizates (TPV)

  • Thermoplastic Polyolefins (TPO)

  • Poly Vinyl Chloride (PVC)

  • Polystyrene (PS)

  • Polyethylene Terephthalate (PET)

  • Polybutylene Terephthalate (PBT)

  • Polyamide

  • Polycarbonate

  • Acrylonitrile Butadiene Styrene (ABS)

  • Others

• Application Outlook (Volume, Kilotons, Revenue, USD Million, 2019 - 2030)

  • Automotive

  • Building & Construction

  • Electrical & Electronics

  • Packaging

  • Consumer Goods

  • Industrial Machinery

  • Medical Devices

  • Optical Media

  • Others

• Regional Outlook (Volume, Kilotons, Revenue, USD Million, 2019 - 2030)

  • North America

    • U.S

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Netherlands

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

  • Central and South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • Saudi Arabia

    • South Africa