The global Plastic Compounding Market size is anticipated to reach USD 93.1 billion by 2028, according to a report by Grand View Research, Inc., growing at a CAGR of 5.5% over the forecast period. Rapidly developing construction and automobile sectors are anticipated to drive the demand for interiors, exteriors, and under-the-hood components. The rising scope of application of plastic compounding in under-the-hood components in the automotive industry, in building interiors and exteriors in the construction & infrastructure industries, and in the electronics, durables, and wires & cables industries is anticipated to fuel the market growth.
However, the COVID-19 outbreak has affected the raw material prices of plastic compounding. Recently, crude oil prices slumped due to the global pandemic. A decline in demand, halts or slowdowns in the manufacturing industry, and restrictions in supply & travel are resulting in the reduction of crude oil prices. Thus, the raw material providers who can procure or store crude oil in the current situation can generate a significant profit margin.
Polyethylene Terephthalate (PET) is the plastic used for manufacturing bottle containers that are used for packaged water and carbonated beverages. As a raw material, PET is recognized as a safe, strong, flexible, non-toxic, and lightweight material that is 100% recyclable. Hence, it has gained wide acceptability and, in turn, is anticipated to drive the market growth over the forecast period.
Asia Pacific was the leading market for the PET compound segment in 2019. Ever-increasing demand for beverages, mainly carbonated and nutritional drinks, is anticipated to drive the regional consumption of PET compounds. This trend is favored by a rise in population, changing lifestyles, and the emergence of domestic beverage manufacturers. The presence of a large pool of contract bottlers in the region shall also increase the scope of the packaging application segment.
Traditionally, the construction industry has been a major consumer of plastics with product applications ranging from pipe fittings and insulation to masonry materials and equipment. Plastic compounds are modified in accordance with their requirements. For instance, flame retardant additives are added to Polyvinyl Chloride (PVC) compounds.
Developing countries, such as Mexico, are expected to benefit from the rising construction spending and inclination of consumers toward utilizing sustainable and lightweight building materials in place of conventional materials. The expanding automotive sector and changing consumer buying behavior, from considering cars as luxuries to necessities, are also significant factors anticipated to boost the plastics sector growth.
The COVID-19 pandemic has affected the revenue generation of the companies operating in the global market. For instance, SABIC, one of the prominent players, witnessed a decline in revenue in the first quarter of 2020 by 18% as compared to the first quarter of 2019 due to decreased product demand as a result of challenges in supply/demand balance caused by the pandemic.
Related Press Release@ Plastic Compounding Market Report
Plastic Compounding Market Report Highlights
- The global market was valued at USD 61.4 billion in 2020 and is estimated to grow at a CAGR of 5.5% from 2021 to 2028
- In terms of revenue, Polypropylene (PP) held the largest revenue share in 2020 as it is the most consumed product
- High demand for PP from the global packaging and medical device industries is estimated to drive the segment growth over the forecast period
- Increasing requirement for flame retardancy, heat resistance, and improved serviceability is anticipated to drive the product demand in the electronics and electrical industry
- Construction is the leading application segment for Polyethylene (PE) compounds, with the segment accounting for a mass application globally
- Major manufacturers have been acquiring independent compounding facilities, rather than establishing plants, to strengthen their position in the global market