The global plastic compounding market size is anticipated to reach USD 112.08 billion by 2030, advancing at a steady CAGR of 7.4% during the forecast period of 2022 to 2030. The process of plastic compounding involves the customization of the basic plastic raw material using various additives for achieving the required property, colors, and performance requirements. Polyethylene and polypropylene are two of the most widely used base polymers in this process, while modifiers in pellet or powdered form can be added to them. The consistently high demand for plastics from industries such as automotive, electronics, packaging, construction, and medical devices, among many others, is expected to remain the primary driver of industry growth in the coming years.
There has been increasing use of plastic substitutes for wood, glass, metal, natural rubber, and concrete structures, as they offer more flexibility in terms of properties required for a particular application, while also proving to be economical in many cases. Furthermore, when compared to wood or metal fittings, plastic fittings can be installed very easily, while the option to choose from a variety of color combinations lends an aesthetic appeal to them. The construction industry has been on an upswing in developing economies globally, and this has helped in ramping up the demand for plastics, and thus the demand for the compounding process. Products such as expanded polystyrene, polyvinyl chloride, and high-density polyethylene are widely utilized in application areas such as cables, seals, pipes, insulation, and doors & windows.
Plastic compounding is a very elaborate process that has stages including the determination of additive ratio, high-speed mixing using twin-screw extruders, and melt mixing and cooling, after which the final pellet cutting & packaging is done. There is an increasing demand for bio-based products on account of government encouragement to combat the depleting reserves of crude oil and the various environmental issues that arise out of the use of petrochemical polymers. As a result, products such as polybutylene succinate, polyhydroxyalkanoates, and polylactic acid have begun to be widely utilized across agricultural and biomedical applications, in place of their petrochemical counterparts.
Key players are involved in the launch of new products and technologies, along with other growth strategies such as mergers and acquisitions, partnerships, and geographical expansions. Such developments are very frequent in the industry, which has kept it on a steady growth path in recent years. For instance, in February 2022, BASF SE announced the acquisition of the PA66 business of Solvay, as part of a takeover process. Some of the acquired products in this takeover include various grades of polyamide as well as polyphthalamide, and they will be traded across the European region in the coming years.
Plastic Compounding Market Report Key Takeaways
- With an increasing focus on reducing vehicle weight and improving efficiency, plastics have been marked exclusively by manufacturers for this purpose. As per the American Chemistry Council, a single pound of plastic or its composites helps replace 2-3 pounds of a corresponding heavier material, which helps improve fuel efficiency and reduce greenhouse gas emissions
- In terms of product, the polypropylene segment held the largest revenue share of over 25% in the market in 2021; polypropylene compounds are widely utilized in the automotive sector on account of their serviceability and high impact resistance. As the sector grows steadily in developing regions such as South America and Asia Pacific, the segment demand is expected to advance further
- The growth of the plastic compounding market can face constraints in the form of crude oil price volatility across the globe, on account of political instability, imbalance in demand-supply, as well as seasonal variations. The formation of partnerships between companies to reduce the overall cost of production is another factor likely to impact market growth in the coming years
- The demand for electrical and electronic products has been on a constant rise due to the availability of new technologies, which has helped in increasing the production volumes of these items. With plastics playing a vital role in the designing and functioning of electronic devices and gadgets, this segment is expected to remain a major end-user in the plastics compounding space
- The market for plastic compounding in Europe is expected to undergo frequent changes in the coming years, with organizations such as the European Chemicals Agency (ECHA) implementing stringent regulations to reduce the dependence on plastics. This is expected to act as a challenge for manufacturers, leading to the development of sustainable products
- The plastic compounding industry is highly fragmented, with SMEs occupying more than 60% of the overall market share. The market is highly competitive, with companies utilizing aggressive tactics such as product launches at a frequent pace and rapid geographical expansions to drive growth
- Sustainability and capacity expansions are two areas that have been the focus of companies in the market. For instance, in August 2022, Covestro AG announced plans to set up the company’s dedicated line for the mechanical recycling of polycarbonates at its Shanghai facility. This line is expected to address sustainability demands from the automotive, electronics and electrical, and consumer goods spaces
Plastic Compounding Market Segments
- Plastic Compounding 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 (PA)
- Polycarbonate (PC)
- Acrylonitrile Butadiene Styrene (ABS)
- Others
- Plastic Compounding Application Outlook (Volume, Kilotons, Revenue, USD Million, 2019 - 2030)
- Automotive
- Building & Construction
- Electrical & Electronics
- Packaging
- Consumer Goods
- Industrial Machinery
- Medical Devices
- Optical Media
- Others
- Plastic Compounding Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2019 - 2030)
- North America
- Europe
- Germany
- U.K.
- France
- Italy
- Netherlands
- Asia Pacific
- China
- Japan
- India
- South Korea
- Central & South America
- Middle East & Africa
- Saudi Arabia
- South Africa
- List of Key Players in the Plastic Compounding Market
- BASF SE
- LyondellBasell Industries Holdings B.V.
- Dow, Inc.
- DuPont de Nemours, Inc.
- 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
