Global Engineering Plastics Market
Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)
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Engineering plastics accounts for more than 10% of the total plastics demand worldwide. Engineering plastics demonstrates exceptional performance and mechanical properties compared to other commodity plastics such as PVC, polystyrene, polyethylene and polypropylene. Engineering plastics have better heat resistance, chemical resistance, fire retardancy and impact resistance, thus making them ideal material for engineering applications.
Every year more than 25 million tons of engineering plastics are produced across the globe. Engineering plastics are used in variety of industries: Building & Construction, Automotive, Electrical & Electronics, Consumer Goods, Packaging, Medical, and Industrial Goods. Automotive was the largest consumer of engineering plastics in 2018.
Growth in automotive is primarily driven owing to the rising trend of lightweight and fuel-efficient cars. Fuel efficiency has become an integral part in car designing due to the stringent environmental regulations and rising fuel costs. Engineering plastics are ideal materials for lightweight cars, replacing metal and glass in various interior and exterior applications. Electrical and electronics are also one of the major consumers of engineering plastics. Engineering plastics offer freedom in product design and have ability to match complexities in electronic devices. They also add durability, heat & electrical insulation and impact resistance to the end products.
In terms of demand and production, Asia Pacific region was the leading region in 2018 with China occupying lion’s share. Automotive and electronics industry in China is expanding at a rapid pace owing to the shift towards lighter and durable materials thus, providing ample opportunity for strong market growth. Europe and North America are also likely to exhibit steadfast growth especially due to stringent government regulations regarding greenhouse emissions and persuasion for developing lightweight materials for the automotive industry.
Shift towards Lightweight and Durable Materials
Exploration towards alternative solutions for use of metal parts in various end-use industries will continue to thrust the growth of engineering plastics. New technological advancements and material innovation will allow engineering plastics to explore new applications. Rebound in construction industry across developed economies, especially in skylights, window glazing, and roofing systems for nonresidential buildings is expected to drive the demand for engineering plastics. ABS, polycarbonate and polyamides will continue to be the most widely used engineering plastics across the globe. Together, they accounted for more than 65% of the total engineering plastics demand in 2018.
There is also a growing trend of shift from traditional materials such as glass and metal towards engineering plastics in medical devices. Engineering plastics can compete its metal counterparts when it comes to strength and also gives an added advantage of being lightweight, cheaper and flexible. Manufacturers are also looking for alternative materials like engineering polymers to reduce expenses with elements like payment reforms, medical device taxes and globalization bringing them down.
Low Recycling Rates Could Play Spoilsport
Recycling remains one of the major challenges for the ever growing engineering plastics market. Recycling rates are also very low across all the regions, thus generating more amount of waste which is either incinerated or landfilled. Governing authorities across developed economies are developing new business models and processes to recycle this waste. Europe is leading the way for recycled materials with adoption of circular economy policies and technological advancements in recycling process. Growing trends in clean technologies such as electric vehicles might take a toll on the demand of few engineering polymers especially in under the hood applications. Advanced composites can compete with engineering plastics and might scupper the growth in few applications.
Focus on Capacity Expansion and New Product Development
Capacity expansion and product innovation has key to gain advantage in the competitive market. Prominent companies in the market such as BASF, Celanese, Covestro, SABIC, Domo, DSM etc. have expanded their production capacitiesin the recent past owing to the growing demand from automotive, electronics and building & construction industry. Furthermore, the companies are also focusing on production and logistics digitalization to reduce environmental impact and inefficiencies.
Manufacturer have also adopted for M&A and JV strategies to strengthen their foothold in the regional market. In 2019, DSM acquired SRF’s engineering plastic business to gain competitive advantage in the India market. DMS saved capacity expenditure with this acquisition and also acquired consumer base in automotive and electronics industry in India. In 2020, BASF SE also acquired Solvay’s polyamide business to strengthen its position and integration across the value chain.