Plastic Compounding Market Size, Share & Trends Analysis Report By Product (PP, PET, TPV, TPO, PVC, PBT, ABS), By Application (Automotive, Electrical & Electronics, Construction), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global plastic compounding market size was estimated at USD 63.45 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 7.6% from 2023 to 2030. Increasing substitution for natural rubber, wood, metals, glass, and concrete by plastic is expected to drive the growth of the plastic compounding industry over the forecast period. 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 to external unwanted factors like dust or water. The properties of plastic compounds can drive its market growth 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 the high demand from the packaging sector. PET is mostly used in the production of bottles and contributes to a significant market share in the plastic 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 boost the PET market’s growth 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 is the second largest market owing to the high demand from the automotive sector followed by the 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 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 plastic industry value chain swiftly.

Future supply and demand changes are also expected to keep 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 bio-based polymer production. 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 application.

Product Insights

The polypropylene segment led the market and accounted for more than 29.79% of the revenue share in 2022. Its compounds are largely used in automotive applications owing to their 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; plastics 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 & electronics, and packaging. PE is an integral material for the packaging industry. Construction is the leading application market for polyethylene compounds with a significant market 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, Middle East, and Latin America is expected to provide growth opportunities for PVC compounds considering relatively lax 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, which shall have a positive influence on the growth of PVC compounds over the forecast period.

Application Insights

The automotive segment accounted for more than 24.91% of the overall market revenue in 2022. Increasing incorporation of plastics as opposed to metals and alloys in automotive components has been a major factor driving the segment’s 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 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 over the future, thus driving demand for compounded plastics.

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

High consumerism in major developed countries like the United States, China, Germany, India, and Brazil drives 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 plastic compounding 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. Also, a favorable environment in Asia that promotes small-scale enterprises to develop, and government-driven tax incentives for foreign corporations are expected to increase sales of industrial machinery and equipment. Companies manufacturing these 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 the largest share of the others application segment. 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 44.44% of the share of global revenue in 2022 favored by the economic environment and the emergence of plastic manufacturers. The growing manufacturing sector shall drive the demand from 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 the way for regional market growth. Most 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 among others, which further fuel the regional demand.

Rapid infrastructure development in the U.S. and Mexico is predicted to augment product demand during 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 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’s growth.

On the other hand, 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 European Commission have characterized stringent environmental regulations in Europe about 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 to develop sustainable technologies and products.

Expanding construction sector, majorly in Qatar and the UAE, owing to advanced real estate regulatory framework, increasing the number of infrastructure projects, and economic recovery is expected to drive the demand for products. 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 in nature 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 K

Recent Developments

• In June 2023, BASF Venture Capital Gmbh (BVC), the corporate venture company of BASF group, declared an investment in DePoly SA, a Swiss-based sustainable plastic solution provider, for the development of sustainable solutions for circular economy.

• In June 2023, SABIC, a global leader in the chemical sector, received the 2023 American Chemistry Council (ACC) Sustainability Leadership Award for achieving ocean bound plastic (OCP) solutions.

• In May 2023, Convestro AG, a German raw materials company, emphasized the requirement of increased recycling technologies for boosting the low recycling rate of already used plastics.

• In May 2023, Dow Inc., a leading provider of materials, came into an agreement with New Energy Blue, a bio-conversion company, for purchasing the bio-based ethylene that will be developed by New Energy Blue to deplete carbon emissions from plastic production.

• In May 2023, Evonik Industries AG, a German chemical company, introduced a range of additives TEGO® Cycle with the objective of transforming plastic wastes into beneficial plastics.

• In May 2023, SABIC along with worldwide chemical companies signed an agreement with TNO, a Dutch innovation company, for the establishment of a research and development (R&D) facility to process plastic waste.

• In November 2022, LyondellBasell Industries Holdings B.V., a global leader in developing and supplying materials, collaborated with Audi, a German automotive manufacturer, for developing automotive plastic parts from varied automotive plastic wastes.

• In October 2022, Asahi Kasei Corporation, a Japanese chemical company, promoted the use of green power produced from renewable energy at industrial plants for manufacturing plastic compounds.

Plastic Compounding Market Report Scope

Global Plastic Compounding Market Report Segmentation

This report forecasts revenue and volume growth at global, regional & country levels and provides an analysis of the latest industry trends 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 Billion, 2019 - 2030)

  • Polyethylene (PE)

  • Polypropylene (PP)

  • Thermoplastic Vulcanizates (TPV)

  • Thermoplastic Polyolefins (TPO)

  • Polyvinyl Chloride (PVC)

  • Polystyrene (PS)

  • Polyethylene Terephthalate (PET)

  • Polybutylene Terephthalate (PBT)

  • Polyamide (PA)

  • Polycarbonate (PC)

  • Acrylonitrile Butadiene Systems (ABS)

  • Others

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

  • Automotive

  • Building & Construction

  • Electrical & Electronics

  • Packaging

  • Consumer Goods

  • Industrial Machinery

  • Medical Devices

  • Optical Media

  • Others

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

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

    • Italy

    • Netherlands

    • Austria

    • Switzerland

    • Hungary

    • Czech Republic

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

  • Central and South America

    • Brazil

    • Argentina

  • Middle East and Africa

    • Saudi Arabia

    • South Africa