Impact of COVID-19 on Plastic Compounding Market : Implications on Business

Plastic compounding is one of the effective methods for transforming the characteristics of engineered thermoplastics using a blend of plastics and additives. This compounding process tends to change the physical, thermal, electrical, or esthetic characteristics of the plastic. The process entails incorporation of an extensive range of additives, fillers, and reinforcers to base resin in order to achieve a wide range of conductivity, flame retardancy, wear resistance, and structural and precoloring properties. These plastic compounds offer superior physical properties that augment their performance for various automotive, electronics, industrial, medical, and consumer goods applications. The global plastic compounding market is expected to expand at a significant pace during the forecast period, driven by the increase in production of automotive components and electrical & electronic devices. The plastic compounding market was valued at around US$ 4,500.0 Mn in 2018 and is projected to expand at a CAGR of around 5.5% during the forecast period.

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Plastic compounds are widely used in the electrical & electronics industry. These compounds are deployed in a wide range of antistatic and electromagnetic shielding applications. Thermally and electrically conductive plastic compounds were developed through the addition of common fillers such as carbon black, graphite, metallic fibers, flakes, or carbon fibers. These plastic compounds that possess high content of conductive fillers exhibit high degree of electrical conductivity. These conductive plastic compounds offer adjustable electrical conductivity. They are light in weight and possess good processability. They are also mass-production friendly and cost-effective. Of late, electric and electronic products have gained increasing importance in a number of end-use industries. Growth in popularity of miniaturization, specifically in the fields of electronics, electrical engineering, communications engineering, and automotive engineering, is boosting the need for high quality electric and electronic components. Increase in production of such high quality electric and electronic components is projected to augment the demand for plastic compounds in the near future.

plastic compounding market

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Ongoing studies and research programs indicate that reduction in weight of automobiles results in lower carbon emissions and increase in fuel efficiency and performance of vehicles. Automotive manufacturers are compelled to lower the weight of vehicles due to the implementation of stringent regulations against carbon emissions. Automotive manufacturers are also engaging in the manufacture of electric vehicles, owing to the norms imposed on fuel consumption. Plastic compounds are light in weight and are replacing metal components in automotive and electrical & electronic applications. Rise in production of lightweight vehicles and growth in awareness about electric cars are estimated to boost the demand for plastic compounds.

Advancement in filler material technology is estimated to influence the physical, chemical, and structural properties of plastic compounds. Research programs and government initiatives on plastic compounds are expected to encourage product development and manufacturing process development. Rise in awareness about filler material technology and filler material application among automotive and electric & electronic component manufacturers is anticipated to boost the demand for plastic compounds. Plastic compounders and plastic converters are carrying out product development through stable, resource-saving, and energy-efficient processes. Increase in product development programs among plastic compound manufacturers and rise in research and patents activities regarding filler materials among institutes and universities are likely to propel the plastic compounding market during the forecast period.

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Asia Pacific is a key region of the global plastic compounding market. It accounted for significant share of the market in 2018. China is a major consumer of plastic compounds in Asia Pacific due to the high utilization rate of plastic compounds in automotive components and electrical & electronic devices. China is also a leading producer of plastic compounds. Presence of large automotive component manufacturers and electrical and electronic device manufacturers and existence of various small domestic plastic compound manufacturers in the region are expected to drive the plastic compounding market in Asia Pacific. Relocation and repositioning of manufacturing capacities of automotive components and electrical & electronic devices from the western hemisphere to East Asia is anticipated to augment the demand for plastic compounds. Furthermore, plastic compounders in Asia Pacific are expanding their production facilities to meet the rising demand for plastic compounds in several end-use industries in the region. Rapid industrialization and expansion of automotive component manufacturing plants in China, Thailand, and Vietnam; and expansion of electrical & electronic component manufacturing plants in India, Indonesia, and South Korea are projected to propel the demand for plastic compounds. The impact of ongoing research & development activities among universities and plastic converters & compounders in North America and Europe is high. Therefore, the plastic compounding market in North America and Europe is estimated to expand at a rapid pace during the forecast period.

Eminent players operating in the global plastic compounding market include BASF SE, RTP Company, Ravago Group, SABIC, LyondellBasell Industries Holdings B.V., DowDuPont Inc., Mexichem Specialty Compounds Inc. (Mexichem S.A.B. de C.V.), Coperion GmbH, Adell Plastics, Inc, Sojitz Corporation, Polyvisions Inc, Celanese Corporation, Covestro AG, Teknor Apex, Trinseo LLC, Asahi Kasei Corporation, Mitsui Chemicals, Inc., KRATON CORPORATION, Kuraray America, Inc., and KRAIBURG. These are large plastic converters possessing dedicated manufacturing technologies, and experience and expertise to manufacture plastic compounds. The global plastic compounding market is highly fragmented; the top five manufacturers accounted for approximately 30% share of the market in 2018. Most of the plastic compounds are produced in Asia Pacific. Compounder and converters functioning in the market are focusing on research programs and product development activities to cater to the rising demand for plastic compounds in automotive and electrical & electronics industries. These strategies enable key players to meet the increase in requirements of automotive and electrical & electronic industries and gain higher share of the plastic compounding market.

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