Plastic compounding is a method of changing the characteristics — physical, electrical, thermal, or aesthetic — of thermoplastics. It is the third step in plastics production, after acquiring the raw material and synthesizing the polymers. Depending upon what characteristics the final product should have, a base resin is selected and then specific additives, reinforcers, or fillers are incorporated into the compounded plastic using a melting and blending process. Pellets of this compounded plastic are sent to the customer for sheet extrusion or injection molding.

Today’s market size shows revenues for plastic compounding in 2019 and projected for 2027. Global plastics production continues to increase. In 2018, 359 million metric tons of plastic were produced, up from 245 million metric tons a decade earlier. The increasing use of plastic as a substitute for products traditionally made of glass, metal, wood, natural rubber, and man-made materials such as concrete will drive growth in this industry. There is also a growing demand for plastic in various industrial applications due to its versatility, easy molding, and ability to form a desired shape.

Automotive applications claimed the highest market share, about 25%, in 2019 owing to the greater reliance on plastics in automotive components. Packaging, electrical and electronics, building and construction, and consumer goods round out the top 5 applications in terms of market share. All 5 together comprised more than 75% of the plastic compounding market. Although medical devices claimed a very small share in 2019, this is expected to expand in 2020 while the automotive application share declines. As the world battles COVID-19, demand for personal protective equipment and some medical devices, made with plastics, has skyrocketed. At the same time, automotive plants worldwide shut down the production of vehicles while many retooled to build ventilators, respirators, and plastic face shields.

The Asia-Pacific region held the largest share of the market in 2018 due to a growing number of plastics manufacturers locating there and an expanding manufacturing sector. The region is the largest producer and consumer of automobiles, consumer goods, and packaging materials and one of the largest producers and consumers of electrical and electronic products. Most producers are involved in at least one of the segments of the plastics industry. Globally, more than 60% of plastic compounders are small and medium-sized businesses, many expanding their production capabilities. Major corporations such as automotive manufacturers and Original Equipment Manufacturers tend to contract with compounders who cater specifically to their company’s needs. Chinese compounders, however, tend to work with a large number of small to medium-sized businesses. Some leading global plastics compounders include BASF SE, LyondellBasell Industries N.V., The Dow Chemical Co., SABIC, Asahi Kasei Plastics, and Covestro (Bayer Material Science).

Geographic reference: World
Year: 2019 and 2027
Market size: $59.10 billion and $104.41 billion, respectively
Sources: “Plastic Compounding Market Size, Share & Trends Analysis Report by Product (PP, PET, TPV, TPO, PVC, PBT, ABS), by Application (Automotive, Electrical & Electronics, Construction), and Segment Forecasts, 2020 – 2027,” Grand View Research Report Summary, February 2020 available online here; “Plastic Compounding Market Size Worth $104.41 Billion by 2027: Grand View Research, Inc.,” CISION PR Newswire, March 3, 2020 available online here; “What is Plastic Compounding,” Marval Industries Inc. available online here; “Global Plastic Production from 1950 to 2018 (in Million Metric Tons),” Statista, October 2019 available online here; Jack R. Nerad, “How Car Companies are Helping to Produce Medical Personal Protective Equipment (PPE),” J.D. Power, March 24, 2020 available online here.
Image source: annca, “pin-pinn-needle-thumbtack-plastic-3092912,” PIxabay, January 20, 2018 available online here.