The global commodity plastics market is anticipated to grow at a CAGR of 7.0% between 2018 and 2026. Commodity plastics offer numerous scopes for applications across various industries. They can be used for various purposes such as packaging, photography, garbage containers, magnetic tapes, and clothing, among others. Moreover, they find application across various industries including consumer goods, manufacturing, automotive, packaging, construction, electronics, pharmaceutical, and textiles, among other industries. An accelerating growth in the demand for flexible packaging, automobile parts for reducing weight etc. among other consumable products is directly propelling demand for these products. In addition, bio-based plastics offers better options in terms of stringent regulatory framework for plastic usage in comparison to the traditional ones. They exhibit properties such as moisture resistance, and high durability. All the factors together are positively impacting the demand for commodity plastics.
The increasing shift in the utilization of bio-based polyethylene terephthalate (PET), polystyrene (PS), polyethylene (PE) to petroleum based plastic products is expected to alter the market dynamics. This shift is largely due to the fluctuating crude oil prices and increasing awareness about the environmental pollution created by use of fossil fuels. The continuous increase in metal pricing is also responsible for growing demand for plastics. However, some of the countries are banning usage for non-biodegradable plastics, as a result of which the industry players are increasingly focusing on innovation. Besides, the commodity plastics market is experiencing heavy demand, due to the increasing demand for lightweight electric vehicles.
The global commodity plastics market is segmented based on types of product including PE, Polypropylene (PP), poly vinyl chloride (PVC), PET and PS. PET was the largest product segment in 2017. Increasing demand from the packaging industry and growing popularity of flexible packaging are some of the factors driving the commodity plastics industry.
The commodity plastics market is further bifurcated into application sectors including consumer goods, automobile, packaging, construction, textile, pharmaceuticals & medical and electronics. Packaging segment was the largest application segment in 2017. Development in packaging materials development technology, demand for flexible packaging products and increasing use of renewable plastics for packaging is anticipated to be the primary factors driving the industry growth. Increasing demand for bio plastics is yet another potential factor for rising demand for commodity plastics.
Asia Pacific region dominated the commodity plastics market in 2017. The region is anticipated to experience significant growth over the forecast period, owing to the heavy investments made by the governments of emerging nations to strengthen their base of skilled workforce. This is one of the reasons that plastic manufacturing and processing companies for the west have started setting their base in the region for skilled but low wage labors. The recent government initiatives taken by Indian, Thailand, and Chinese government to promote the manufacturing sector are acting in favor of the market. For instance, in 2015, the Government of India (GOI) introduced ‘Make in India’ project. Similar steps were taken by Thailand government, by the announcement of favorable buyer’s incentive.
The industry is characterized by the presence of a large number of global, regional, and local players. There is high competing on differentiated product lines. Furthermore, they face stiff competition in terms of quality, pricing, and technology. The presence of numerous vendors results in lowering down of cost price and sales volumes. Such scenario usually creates a negative impact on the financial health of a company. Moreover, the market products are subject to several state, local and federal laws and regulations, duties, and trade agreements.
Some of the key players operating in the commodity plastics market include Covestro, BASF SE, Mitsui Chemicals Inc., Eastman Chemical Corporation, INEOS, Mitsubishi Chemical Corporation, DIC Corp & RTP Company Huntsman Corporation, LyondellBasell, The Dow Chemical Co., Nippon Polyurethane Industry Corp Ltd., Woodbridge Foam Corp., Lubrizol Corporation, The Rampf Holding GmbH & Co. KG. These players are observed proactively engaging in activities aimed at the development of new products and advanced technology.