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The global Plastic Market size was USD 434.71 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the product witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 1.2% in 2020. The market is projected to grow from USD 439.28 billion in 2021 to USD 616.82 billion in 2028, at a CAGR of 5.0% in the 2021-2028 period. The sudden decline in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Plastics, also known as polymers, are used to manufacture a wide variety of products ranging from paper clips to spacecraft due to their versatility, easy manufacturing, moldability, lightweight, waterproof nature, and low cost. They are traditionally derived from natural gas and petroleum. The depleting sources of polymers have encouraged manufacturers to use renewable sources. The plastics manufactured using renewable biomass sources, such as corn starch, sawdust, vegetable fats and oil, food waste are called bioplastics. Moreover, rising awareness about the environmental harms caused by polymers influences manufacturers to develop recyclable products. Surging demand for plastic packaging solutions for the protection of products is a key factor driving the market.
Supply Chain Uncertainties Caused by COVID-19 Hinders Growth
In the wake of the pandemic, the plastics demand from automotive and building & construction industries has declined substantially. This decline is owed to the decrease in manufacturing activities in these industries and increasing lockdown restrictions globally. Additionally, the crude oil prices fell significantly, entering the negative territory due to demand collapse and lack of storage capacity for excess supply. However, the product demand for producing medical personal protective equipment (PPE) such as masks, face shields, respirators, goggles, gowns, gloves, and coveralls in healthcare industry will propel the market. For instance, according to the National Health Service trust in Lincolnshire, England, about 2.3 billion PPE products were distributed to health & social care personnel in England between February and July 2020.
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Increasing Demand for Engineering Plastic to Favor Growth
Engineering plastic being more robust and more durable than regular ones have increased the product demand. They provide better thermal and mechanical properties along with being much lighter and cost-effective. The growing need for better plastic solutions for various applications such as componentry, machinery, and construction further supports market expansion. Moreover, the rising demand for metal substitution increasingly leads to broader usage of engineering polymers in various industries. These materials offer more decisive advantages over metal structures in many industries such as automotive engineering, construction, solar, and water. As per DSM, several global OEMs are replacing metal parts with engineered plastic materials and components. For instance, the crankshaft covers for Volkswagen earlier made from aluminum are now made from polymers. This resulted in about 40% weight reduction of the part.
Rising Demand for Plastics from Packaging Industry to Drive the Market
The product demand is advancing in widespread industries such as food & beverage, consumer goods, automotive, and electrical & electronics. The increasing demand for packaging material from food & beverage industry is driving the product consumption globally. The food manufacturers prefer to use packaging that minimizes the food quality degradation and avoid contamination. The ability of plastic to act as a barrier between food products and the external environment is fueling the demand.
Besides this, the ability of polymers to defend physical stress and offer high durability is increasing their usage in sports, fashion, polymer clay, and toy-making. Moreover, they are easy to mold and offer flexibility to produce packaging in any shape and size. In the textile sector, their utility is surging owing to their high elasticity, durability, and enhanced visual appeal. Moreover, the rigid nature of polymers makes them suitable for packaging automotive and electrical spare parts. Thus, the increasing application across food & beverage, textile, electrical & electronics, automotive, and consumer goods industries is augmenting the Plastic Market growth.
Stringent Regulations over Usage of Plastics to Affect Growth
Regulations over product usage are likely to affect market growth. Stringent government regulations and other policies have come into the picture in response to the growing concerns over the damage caused by polymers to the environment. To reduce the environmental pollution caused due to plastics use, many manufacturers and governments have made efforts towards adopting greener alternatives. For example, the UN Environment Program (UNEP) has started a Clean Seas campaign in 2017 in over 50 countries that urge governments to impose plastic reduction policies, encourage industries to minimize polymer-made packaging, and reform their products.
Additionally, many countries, including India, have committed to removing single-use polymers from the market by 2022. Shift towards non-plastic products and conventions over plastic use together act as a restraining factor towards the lucrative growth opportunities of this market.
Polyethylene Segment to Lead the Market Share
Based on type, the market is segmented into polyethylene, polyethylene terephthalate, polyvinyl chloride, polypropylene, polyamide, acrylonitrile butadiene styrene, polycarbonate, polyurethane, polystyrene, and others. Amongst these, polyethylene and polypropylene (PP) are the major types due to their increased demand from the end-users such as packaging and automotive. Several manufacturers use polymers for packaging their products as they are durable and act as a barrier between moisture and the product. The usage in the automotive industry is increasing as manufacturers are reducing the weight of the vehicle to increase efficiency and minimize carbon emissions.
Polyvinyl chloride (PVC) is mainly used in the production of pipes & fittings owing to its numerous advantageous properties such as high modulus of elasticity, electric insulation, resistance towards chemicals, and thermal insulation. The construction industry uses PVC products such as doors, windows, and frames due to their longer life-cycle, enhanced looks, and easy availability of material. Polyethylene terephthalate (PET) is used on a large scale for packaging and bottling applications. It observed high demand from the packaging of food & beverage industries as it is non-toxic, lightweight, strong, and can be recycled easily. Due to its strong and flexible nature, PET is also the preferred material for 3D printing.
Polyamide is majorly used in the textile industry owing to its solid and flexible properties. It exhibits good elasticity, high tensile strength, and is wrinkle-proof. These benefits make it suitable for usage in clothes, mats, and other products. Polyurethane, in the form of foam, observed high demand from the furniture and automotive industries. Polycarbonate is mainly used for electrical & electronics applications due to its high electrical insulation property.
Acrylonitrile butadiene styrene (ABS) is a rigid and sturdy plastic that provides resistance to chemicals. Hence, it is used in camera bodies, housing appliances, packing crates, and luggage. Polystyrene has exhibited high demand from the electronics and packaging industries owing to its insulating and cushioning properties.
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Packaging Segment to Generate the Highest Revenue
According to the end-use, the market is segmented into packaging, automotive & transportation, consumer goods or lifestyle, infrastructure and construction, healthcare & pharmaceutical, electrical & electronics, textile and others. The packaging end use is estimated to remain the leading segment during the review period because of the high demand for polyethylene from the food & beverage packaging industry. The growing use in the production of construction-related products, such as floor covering, films for windows, and fittings & pipes, is surging the product demand from the infrastructure & construction end-use.
Similarly, the automotive & transportation and consumer goods/lifestyle end-use areas are expected to contribute substantially to the growth of the market in the forecast period. The rising adoption of polymers in the automotive industry to increase the efficiency of vehicles and the life of vehicle components is responsible for the growth in this market. These polymers are easily moldable, highly durable, and flexible which makes them the most preferred material for manufacturing numerous products such as iceboxes, containers, housewares, toys, and packaging material.
The increasing use of polymers in the healthcare sector can be credited to their property of guarding against contaminants by acting as a barrier. Healthcare-related products such as gloves, syringes, bandage strips, blood bags, and prosthetics are manufactured using several polymers. In the electrical & electronics industry, they are used to produce household appliances, switches, and light fittings due to their insulating properties.
Asia Pacific Plastic Market Size, 2020 (USD Billion)
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Asia Pacific is estimated to hold largest market share during the review period. China is anticipated to remain the leading country in the region on account of the abundant availability of raw materials at low rates. This is further, minimizing the hurdles involved in polymer production. The growth in Asia Pacific is also attributed to the strong growth in the packaging and construction industries. Additionally, rising demand from the consumer goods industry for manufacturing toys, textiles, and sports goods is expected to drive the market in this region.
In North America, the U.S. held the largest market share backed by the increasing product demand from the electrical & electronics, healthcare & pharmaceuticals, and packaging industries. Europe is anticipated to have substantial growth in the polymers market owing to the rising demand from the automotive sector in the region. Additionally, properties including excellent heat resistance, electric insulation, corrosion inhibition, and low density are supporting the adoption of polymers in Europe.
The key factor influencing the growth in the Middle East & Africa will be the growing demand from the textile and packaging industries. The surging demand for lightweight packaging and the use of polymers over glass and metal are set to upsurge the regional market. Latin America is projected to have growth due to the rising urbanization and the growing number of companies specializing in industrial packaging solutions.
Key Players to Strengthen Position by offering Innovative Solutions to the Packaging Industry
Most of the major companies in this market have a global presence. For example, LyondellBasell is involved in the refining activities and produces several chemicals, and polymer-based products. The company has established its presence worldwide by using strategies such as production capacity expansion and acquisition. It is also keeping up with the latest trends in this market to serve its consumer base efficiently.
Similarly, ExxonMobil is expanding its business globally by adopting strategies including joint ventures and new product development. SABIC, another key player, has a strong presence in the Middle East & Africa. The company offers different types of polymers that have helped it in its expansion through joint ventures.
An Infographic Representation of Plastics Market
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The global market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, applications, and types. Also, the report offers insights into plastic industry trends, dynamics, and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the growth of the market over recent years.
Value (USD Billion), Volume (Million ton)
Type; End-Use; and Geography
Fortune Business Insights says that the global market size was USD 434.71 billion in 2020 and is projected to reach USD 616.82 billion by 2028.
In 2020, the market size stood at USD 434.71 billion.
Growing at a CAGR of 5.0%, the market will exhibit significant growth in the forecast period (2021-2028).
The packaging segment is the leading segment based on End-Use.
Rising product demand in the food & beverage industry is the key factor driving the market growth.
Asia Pacific dominated the global market in 2020.
LyondellBasell, ExxonMobil Chemical, INEOS, and SABIC are few of the leading players in the global market.
The rising demand for recyclable plastics from the packaging industry is the key trend leading to the growth of the market.
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