Plastic Compounding Market

Plastic compounding is defined as the blending of base polymers, such as polyethylene (PE), polypropylene (PP), and polyvinyl chloride (PVC), among other thermoelastic and thermoset polymers, with an additive to enhance the physical, thermal, and electrical properties of plastic so as to make it suitable for application in an array of end-use industries. The base polymers are first melted and blended with additives such as antioxidants, colorants, and reinforcements to achieve the required properties.

In terms of product, the market is classified into polypropylene, polyethylene, polyvinyl chloride, polyethylene terephthalate, polystyrene, acrylonitrile butadiene styrene, polyamide, polycarbonate, thermoplastic polyolefins, thermoplastic vulcanizates, polybutylene terephthalate, and others. Among these, Polypropylene accounted for 31.23% share in 2017 and is predicted to grow with the moderate CAGR of 6.50% during the review period. As polypropylene compounds are largely used in automotive applications owing to its high impact resistance and serviceability. This segment is followed by Polyethylene and is expected to register a significant growth during the assessment period.

In terms of application, the market is classified Automotive, Electrical & Electronics, Building & Construction, Packaging, Consumer Goods, Industrial Machinery, Medical Devices, Optical Media, and Others. Among these, Automotive accounted for 24.6% share and is predicted to grow with the highest CAGR of 7.53% over the forecast period. The increasing use of plastic in automotive components and simultaneous rise in passenger car and heavy-duty vehicle production, particularly in Asia and Latin America, is expected to drive market growth during the forecast period. The standardization of emission norms and vehicular weight regulations shall aid in the development of the automotive segment in the future. This segment is followed by Electrical & Electronics and is expected to register a significant growth during the assessment period.

In terms of geography, the market is classified into North America, Europe, Asia Pacific, Latin America, The Middle East & Africa. As per the analysis, the global market is likely to continue growing during the forecast period. The global growth is credible to the wide application scope covered by plastic compounding. Moreover, the rapid growth of the electronics and automotive industry in the emerging economies is estimated to fuel the market growth. For instance, China accounts for nearly 42.73% of revenue generated by the Asia Pacific plastic compounding in 2017 and is estimated to exhibit a significant CAGR of around 6.63% over the assessment period due to the various factors such as rapid urbanization, the rise in per capita disposable income, and change in lifestyle of people.

However, the industry faces challenges with market fragmentation and raw material price volatility. Most plastics are derived from crude oil; hence, the fluctuating prices of crude oil are impacting the price of plastic compounds. With these fluctuations, manufacturers are struggling to maintain profit margins. Moreover, increasing research and development activities in bio-based plastic and stiff competition from close substitutes such as glass and metal in some end-use applications are expected to hamper market growth during the forecast period. Stringent regulatory standards imposed by government agencies on the use of petrochemical-derived products limit the use of petroleum-based plastic. However, key industry players are adopting sustainable and compliant manufacturing techniques to meet these regulatory standards.