The Plastic Compounding Market is Poised for Considerable Growth Owing to Rising Demand from Automot

Author : ojaswini patil | Published On : 16 Jan 2025

The plastic compounding market manufactures engineered plastic materials through blending of base resins, additives and fillers. Plastic compounds provide improved mechanical, thermal and chemical properties compared to basic resins. They are widely used in automotive, electronics, construction and packaging industries. Compounds enhance the durability, resilience and functionality of plastic components. They extend product life and enable design of lightweight and durable consumer goods.

The Global Plastic Compounding Market is estimated to be valued at US$64 billion in 2024 and is expected to exhibit a CAGR of 7.2% over the forecast period 2024-2031.

Key Takeaways

Key players operating in the plastic compounding market are BASF SE, Dow Chemical Company, LyondellBasell Industries, SABIC and Covestro AG. BASF is one of the leading players and offers compounds for automotive, electronics, healthcare and construction applications.

Plastic Compounding Market demand is due to increasing consumption of engineered plastics in various end-use industries. Properties like corrosion resistance, high strength-to-weight ratio and durability drive their use over conventional materials. Automotive industry accounts for over 30% demand for creating exterior body parts, interiors, under the hood components and electrical components.

The market is witnessing expansion in Asia Pacific with China, India, Indonesia and Thailand emerging as major manufacturing hubs. Abundant raw material availability and low labor costs attract plastic manufacturers to set up production facilities. Meanwhile, North America and Europe are slowly adopting sustainable compounds from recycled plastics. Stricter environmental regulations and recyclability focus of automakers fuel use of bio-based and recycled plastic compounds.

Market Key Trends

One of the key trends gaining popularity in the plastic compounding market is the use of sustainable materials. Major players are focusing on developing bio-based and recyclable compounds using agricultural waste, recycled plastics and renewable feedstocks. These compounds help reduce dependence on fossil fuels and provide comparable properties to traditional plastics. For example, BASF launched ultra-high-molecular-weight polyethylene (UHMW-PE) compounds made from sugarcane-based bio-naphtha for durable applications.


Porter's Analysis


Threat of new entrants: The plastic compounding market requires high capital investment for setting up manufacturing units making the threat of new entrants relatively low.
Bargaining power of buyers: The buying power is medium as there are many established players offering substitutable products giving buyers alternatives.
Bargaining power of suppliers: The bargaining power of raw material suppliers like plastic polymers and fillers is medium to high as they are important for production and have few substitutes.
Threat of new substitutes: The threat of substitutes is moderate as alternatives like engineering thermoplastics need considerable investment in R&D and production facilities.
Competitive rivalry: The market is dominated by large players with established brands and regional presence.

North America leads the plastic compounding market in terms of value largely due to high demand from end-use industries like automotive, packaging and construction in the region. The United States accounts for the majority share due to technological advancements and growth in the automotive sector.

Asia Pacific exhibits the fastest growth for plastic compounding market supported by rising domestic consumption complemented by increasing exports from countries such as China and India. Improving infrastructure and automotive manufacturing are driving the plastic compounding demand especially in China and India.

 

About Author:

Priya Pandey is a dynamic and passionate editor with over three years of expertise in content editing and proofreading. Holding a bachelor's degree in biotechnology, Priya has a knack for making the content engaging. Her diverse portfolio includes editing documents across different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. Priya's meticulous attention to detail and commitment to excellence make her an invaluable asset in the world of content creation and refinement.

 

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