Plastic Compounding Market Size, Share & Trends Report

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, 2020 - 2027

  • Published Date: Jul, 2020
  • Base Year for Estimate: 2019
  • Report ID: 978-1-68038-446-8
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 195

Report Overview

The global plastic compounding market size was estimated at USD 59.1 billion in 2019 and is expected to register a compound annual growth rate (CAGR) of 5.2% from 2020 to 2027. Increasing substitution for glass, metals, wood, natural rubber, and man-made materials, such as concrete, is anticipated to drive the growth. The demand for plastic is rising owing to the various industrial applications due to its versatile benefits, easy molding, and ability to form desired shape. 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. 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.

U.S. plastic compounding market size

Europe is the second-largest market owing to the high demand from automotive followed by electrical and electronics and construction sectors. Germany was the leading plastic producer in Europe in 2019. 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 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 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 consumption of polymers derived from petrochemicals in different end-use industries are expected to further incentivize bio-based polymers 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 being accepted in biomedical and agricultural applications.

Further, the outbreak of contagious COVID-19 disease across the globe is severely affecting manufacturing industries, which, in turn, is anticipated to impact the growth of the global plastic compounding market. As COVID-19 continues to spread across the world, work from home rules, order cancellations, and shipping complications are surging in the plastic compounding market.

Product Insights

Polypropylene segment led the market and accounted for more than a 25% share of the global revenue in 2019. 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; 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 popular material for multiple applications in developed economies and emerging economies alike.

Increasing construction spending in Asia, the Middle East, and Latin America are 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 have been successful, such as the recently introduced Dow Chemical’s Ecolibrium plasticizer, which shall have a positive influence on PVC compounds growth over the forecast period.

However, slow down or halt in manufacturing activities to contain the spread of coronavirus pandemic has led to a decline in the consumption of polypropylene and negatively impacted its demand in various applications. Manufacturers are experiencing difficulties in running their production units owing to logistic restrictions and limitations on the movement of people, which are further cascading the impact on the product demand.

Application Insights

The automotive segment is anticipated to account for more than 20% of the overall market in 2019. Increasing incorporation of plastics, as opposed to metals and alloys in automotive components, has been a major factor for 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 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.

Global plastic compounding market share

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 types of 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.

However, the outbreak of COVID-19 has immensely affected the production of automobiles and has caused disruption across the value chain of the automotive industry. Slowdown or halt in manufacturing activities and a decline in demand from consumers owing to the COVID-19 are expected to impact the demand for plastic compounds in automotive applications.

Regional Insights

Asia Pacific (APAC) dominated the market and accounted for over 40% of the revenue share in 2019 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 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 among others, which further fuel the regional demand.

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 the European Commission have characterized stringent environmental regulations in Europe with regards to 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.

Key Companies & Market Share Insights

The global market is highly fragmented in nature with over 60% 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 April 2020, Covestro donated 30,000 pieces of high quality and ready-to-use polycarbonate films for making high-quality face shields to Siriraj Piyamaharajkarun Hospital, Thailand in order to fight against COVID-19 pandemic. Some of the prominent players in the plastic compounding market include:

  • BASF SE

  • Lyondellbasell Industries N.V.

  • Dow, Inc.

  • DuPont

  • SABIC

  • Asahi Kasei Plastics

  • Covestro AG

  • Kuraray Plastics Co., Ltd.

Plastic Compounding Market Report Scope

Report Attribute

Details

Market size value in 2020

USD 61.4 billion

Revenue forecast in 2027

USD 87.8 billion

Growth Rate

CAGR of 5.2% from 2020 to 2027

Base year for estimation

2019

Historical data

2016 - 2018

Forecast period

2020 - 2027

Quantitative units

Volume in kilotons, revenue in USD million and CAGR from 2020 to 2027

Report coverage

Volume forecast, revenue forecast, competitive landscape, growth factors and trends

Segments covered

Product, application, region

Regional scope

North America; Europe; Asia Pacific; Central & South America; Middle East & Africa

Country scope

U.S.; Canada; Mexico; Germany; U.K.; France; Italy; Netherlands; China; India; Japan; South Korea; Brazil; Argentina; Saudi Arabia; South Africa

Key companies profiled

BASF SE; LyondellBasell Industries N.V.; DuPont; Dow Inc.; SABIC; Asahi Kasei Plastics; Covestro AG; Kuraray Plastics Co., Ltd.

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Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global plastic compounding market report on the basis of product, application, and region:

  • Product Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

    • 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 Million, 2016 - 2027)

    • Automotive

    • Building & Construction

    • Electrical & Electronics

    • Packaging

    • Consumer Goods

    • Industrial Machinery

    • Medical Devices

    • Optical Media

    • Others

  • Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

    • North America

      • The U.S

      • Canada

      • Mexico

    • Europe

      • Germany

      • The U.K.

      • France

      • Italy

      • Netherlands

    • Asia Pacific

      • China

      • India

      • Japan

      • South Korea

    • Central and South America

      • Brazil

      • Argentina

    • The Middle East and Africa

      • Saudi Arabia

      • South Africa

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