Market Segmentation
Plastic compounding is a process that involves the extrusion of various plastic polymers and additives, resulting in a mixture that is then pelletized. These pellets are dried and packaged for distribution to various industries. The properties of these compounded plastics, such as their flexibility, lightweight, low density, improved resistance to barriers, durability, insulation, energy efficiency, weather resistance, and aesthetic appeal (available in a variety of colors and metallic finishes), have led to their increased use in a range of industries. The market for plastic compounding in Southeast Asia is experiencing a surge in demand from industries such as packaging, electronics, construction, consumer goods, and automotive. The rapid growth of the construction and automotive industries in this region is expected to drive demand for interior, exterior, and under-the-hood components. As awareness of consumer safety and health risks in industries like electronics, healthcare, wire and cable, construction, and automotive increases, so too is the demand for plastics in the Southeast Asian market. The use of compounded plastic products in automotive applications contributes to reduced fuel consumption due to their ability to decrease the weight and density of vehicles compared to traditional materials like rubber or metals. The majority of plastic compounding applications are found in under-the-hood components in the automotive industry and the interiors and exteriors of buildings in the construction and infrastructure industries. Plastic compounding is also used in the electronics, durables, and wire and cable industries.
The burgeoning population in developing economies, coupled with swift industrialization and urbanization, has prompted many governments to ramp up their spending on construction to meet the escalating demand for infrastructure. This trend, particularly noticeable in India and China, is anticipated to fuel the demand for plastics. As per the Organisation for Economic Co-operation and Development (OCED), the Asia Pacific region was one of the fastest-growing construction markets as of 2018, with China, India, Indonesia, Japan, and Australia leading the way. The construction industry in these countries is projected to see substantial growth in the coming years. Strict regulations concerning recyclability and the dwindling availability of traditional materials like wood and metal are expected to boost the demand for compounded plastics. These are used in various construction elements such as flooring, pipes, windows, insulation, cables, and storage tanks. Plastics are cost-effective, durable, and energy-efficient, consuming less heat compared to metals due to their superior properties. This makes them a popular choice in the construction industry. Moreover, plastics have 85% less specific gravity than metals, resulting in approximately 80% weight savings and between 30% to 50% cost savings in individual components when used in the automotive and construction sectors. Due to these factors, plastics are increasingly being favored over metals. The numerous beneficial properties of plastics, including impact strength, improved aesthetics, easy moldability, scratch resistance, cabin insulation, vibration and noise control, recyclability, and lightweight nature, especially in automotive applications, are expected to drive their demand in the future.
The production of plastics involves the use of various raw materials, including hydrocarbon fuels like crude oil, natural gas, and coal, as well as salt and sand. In North America, the creation of polyethylene (PE) primarily relies on natural gas due to its abundant and inexpensive availability. This makes PE manufacturers in the region highly competitive, leading to a tight resins market and significant exports. Changes in supply and demand are anticipated to cause price fluctuations in the global plastics market. Many of these raw materials are obtained through petrochemical downstream processes. Factors such as political instability, imbalances in supply and demand, and seasonal variations contribute to the volatility of crude oil prices. PE and polypropylene (PP) are crucial raw materials in plastic compounding. As these products originate from crude oil, any price changes directly affect the cost of raw materials, thereby influencing the prices of plastic compounding. In addition, the scarcity of raw materials and variable reseller margins can lead to price increases. A significant gap between demand and supply also contributes to price volatility, especially for PE and PP, due to their increasing demand in various applications, particularly packaging. Global crude oil prices have experienced substantial fluctuations recently, largely due to social and political unrest in major oil-producing countries such as Libya, Venezuela, Nigeria, Iran, and Iraq. This has negatively affected the supply of crude oil, disrupted the balance of supply and demand, and led to price fluctuations. However, key market players are forming strategic alliances and expanding their production capacities to cater to the growing global demand and take advantage of the low feedstock costs in recent years.
This section will provide insights into the contents included in this Southeast Asia plastic compounding market report and help gain clarity on the structure of the report to assist readers in navigating smoothly.
Industry overview
Industry trends
Market drivers and restraints
Market size
Growth prospects
Porter’s analysis
PESTEL analysis
Key market opportunities prioritized
Competitive landscape
Company overview
Financial performance
Product benchmarking
Latest strategic developments
Market size, estimates, and forecast from 2018 to 2030
Market estimates and forecast for product segments up to 2030
Regional market size and forecast for product segments up to 2030
Market estimates and forecast for application segments up to 2030
Regional market size and forecast for application segments up to 2030
Company financial performance