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The global plastic compounding market size was USD 52.74 billion in 2018 is projected to reach USD 87.11 billion by 2026, exhibiting a CAGR of 6.5% during the forecast period from 2019-2026. The plastic compounding market growth is driven by the rising use of these products in various industries, including automotive and packaging. Additionally, growing technological advancements in the automotive and electrical industries and rising construction activities in developing countries are the factors playing a key role in the growth of this market.
Plastic compounding is a process where plastics are melted and then are blended with additives such as colorants, anti-oxidants, and reinforcements to achieve the essential properties. It is carried out in various stages, such as determining additives ratio, high-speed mixing via twin-screw extruders, melting, cooling, final product formulation, and cutting. Furthermore, these processes change the thermal, electrical, aesthetic, and physical characteristics of plastics.
Adoption of Compounded Plastics to Enhance the Properties of Virgin Plastics Will be a Key Market Trend
Plastic compounding is a process that offers several superior properties such as durability, low density, flexibility, aesthetic appeal, lightweight, insulation, improved barrier resistance, improved weathering, and energy-saving to virgin plastics. These properties depend upon the additives used during compounding. Hence, major plastic compounders are developing several additives. For instance, Lanxess provides BAYFERROX 360 pigment and ACETINE TP LXS 51035 plasticizer for plastic compounding.
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Packaging Industry Continues to Play a Key Role in Consumption of Compounded Plastics
Consumption of compounded plastics is growing rapidly owing to the increasing demand for efficient packaging material from the food & beverage, textile, electrical & electronics, and consumer goods industries. End-users prefer packaging material that has high durability, can resist physical stresses, provide flexibility in packaging, and decrease contamination and quality degradation of the packaged product. Additionally, compounded plastics enhance visual appeal of the packaging material.
Increasing Demand for Plastic Compounding from Construction Industry to Drive the Market
In the construction industry, plastics are utilized mainly in the insulation of buildings and infrastructures. They are also used in the manufacturing of various construction products including flooring, performance safety window, doors, cables, and pipes. Ability of compounded plastics to offer properties similar to steel such as strength, texture, and resistance to rust and environmental conditions, has increased their demand from the construction industry. Furthermore, the rising number of commercial & residential projects, coupled with the increasing awareness regarding attractive interiors among the consumers, would also create new opportunities for the plastic compounding market to grow positively.
Need for Lightweight Materials for Production of Automobile Parts to Drive Market
The rising need for low-emission and lightweight vehicles in the automotive industry is expected to drive the market exponentially. Compounded plastics are preferred as the best alternative lightweight material to the heavyweight metals or steel, to increase the fuel-efficiency and to lower the fuel emissions. The use of these plastics in automotive parts would increase vehicle efficiency and the life of vehicle components, which is further expected to boost the market globally.
Fluctuations in Prices of Raw Material to Restrict Plastic Compounding Market Growth
The fluctuations in the prices of raw materials that are used in the production of compounded plastics are anticipated to hinder the market growth. Crude oil and its derivatives serve as feedstock for the production of resins, the major raw material required for this type of plastic. The price of crude oil is also fluctuating, which, in turn, is expected to affect the market.
Polypropylene Segment Likely to Lead Throughout the Forecast Period
In terms of product, the market is segmented into polyethylene, polypropylene, poly vinyl chloride, polystyrene, polyethylene, polybutylene terephthalate, polyamide, polycarbonate, acrylonitrile butadiene styrene, and others. Amongst these, at present, the polypropylene segment is leading owing to its high demand from the automotive industry.
Polypropylene is a lightweight material used for the production of injection molded parts. It offers several properties, such as high chemical resistance to organic solvents and environment corrosive, tensile strengths, superior working temperature, and low-density compound. These properties improve the fuel economy of vehicles and reduce the overall cost of raw material. Hence, the rising need for low-emission and lightweight vehicles in the automotive industry will lead to an increase in the demand for polypropylene.
Polyethylene belongs to the polyolefin resin family and has flexible, durable, and tear resistance properties that increase its preference in the packaging industry. Several manufacturers use polyethylene for packaging their products, as it is durable and acts as a barrier between moisture and the product.
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Automotive & Transportation Segment Is Expected to Generate the Highest Revenue
Based on the application industry, the market of Plastic Compounding is categorized into automotive & transportation, infrastructure & construction, electrical & electronics, packaging, consumer goods/lifestyle, industrial machinery, healthcare & pharmaceuticals, and others. The automotive & transportation segment is set to hold the largest share in plastic compounding market during the forecast period, owing to the rising adoption of these products in the automotive industry. The use of compounded plastics will reduce the overall weight of the vehicle that will further increase vehicle efficiency and the life of vehicle components. Properties such as easy moldability, high durability, and flexibility are expected to make these plastics the most preferred material for the manufacturing of injection molded parts of vehicles.
North America Plastic Compounding Market Size, 2015-2026 (USD Billion)
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The findings based on our research methodology indicate that Asia Pacific holds the highest plastic compounding market revenue in which China and India are the leading contributors. The growth in this region is attributed to the growing automotive sector, owing to the increasing need for low emission vehicles. This region is the largest producer of packaging, electrical & electronics, industrial machinery, automobiles, and construction materials. The rapid industrialization and economic developments are also the driving factors for the growth in this region. Additionally, increasing demand for plastic compounding from the consumer goods industry for manufacturing sports goods, toys, and textiles is also considered as one of the driving factors of the market.
In Europe, Germany is the largest contributor to the market growth. The increasing demand for plastic compounding from the automotive industry would propel the growth of the market in this region. The rising production of electric vehicles in this region would provide several opportunities for the market. In North-America, the U.S. accounted for the largest market share due to the increasing demand for plastic compounding from the electrical & electronics and healthcare & pharmaceutical industries. Plastic compounding is a preferred material due to its properties such as electric insulation, corrosion inhibition, excellent heat resistance, and low density. Infrastructure & construction is another end-use industry which is expected to drive the market in the region because of its high rigidity and tensile strength.
Key Players to Maintain their Strong Position Across Different Application Areas
Major companies are investing substantial amounts in plastic compounding facilities. They have adopted development strategies such as expansion and acquisitions to increase their market presence and cater to the customer demand. Currently, plastic compounders are dependent on the demand of end-users. Hence, the majority of companies in the market are focusing on developing customized products for applications in the automotive, construction, and electrical & electronics industries.
At present, the market is fragmented. The regional control of key players is dependent on factors such as their compounding capabilities, grades of compounded plastics, and the variety of applications that they can serve. Major companies have shown excellence in these aspects.
The plastic compounding market report offers qualitative and quantitative insights on various products and services and the detailed analysis of market size & growth rate for all possible segments in the market.
An Infographic Representation of Plastic Compounding Market
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Along with this, the report provides an elaborative analysis of market dynamics, emerging trends, and competitive landscape. Key insights offered in the report are the adoption trends of plastic compounding by individual segments, recent industry developments such as expansions, acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.
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Value (USD million)
Fortune Business Insights says that the market was valued at USD 52.74 billion in 2018 and is projected to reach USD 87.11 billion by 2026.
The market is projected to grow at a CAGR of 6.5% during the forecast period (2019-2026).
Polypropylene segment is expected to be leading the market .
Rising demand for compounded plastics in automotive industry will drive the growth of the market.
Asia Pacific is expected to hold the highest share in the market.
The rising demand for plastic compounding from packaging industry is the market trend.
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