The North American Market for Plastics Compounding

The North American Market for Plastics Compounding

  • February 2018 •
  • 179 pages •
  • Report ID: 5352054 •
  • Format: PDF
• North American market volume for thermoplastic compounds reached 92.9 billion pounds in 2017 and should reach 104.5 billion pounds by 2022, at a compound annual growth rate (CAGR) of 2.4% for the period of 2017-2022.
• Resin producers as a segment reached 58.4 billion pounds in 2017 and should reach 64.8 billion pounds by 2022 at a CAGR of 2.1% through 2022.
• Processors as a segment reached 26.9 billion pounds in 2017 and should reach 31.1 billion pounds by 2022 at a CAGR of 2.9% through 2022.

Chapter 1: Introduction
This report is an update of the previous edition published in November 2015. A summary of major new developments since the last edition will be provided at the end of the next chapter, “Summary and Developments.”

Study Goals and Objectives
The term “plastics” in this report refers to thermoplastic organic polymers, also commonly called resins.

The majority of the plastics discussed in this study are large-volume commodity resins produced from petrochemical feedstocks; they include familiar resins and resin families:
• Polyethylenes (PEs of several types).
• Polypropylene (PP).
• Polystyrene (PS).
• Polyvinyl chloride (PVC) and its copolymers.
• Thermoplastic polyesters (the most common one of which is polyethylene terephthalate, or PET).

We also include in this study some more specialty engineering resins such as polyamides (nylons) and polycarbonate. To be thorough, we also include an introduction to some newer biopolymers made from biological instead of petrochemical feedstocks, as well as thermoplastic elastomers.

The subject of this study is plastics compounding. What is compounding? As plastic resins leave the chemical polymerization reactor in which they are formed, they are “neat” polymers; that is, they are essentially pure compounds consisting only of the molecules of the polymer produced.

Some of these resins, like PVC, are almost impossible to process as neat polymers; additional chemicals and other materials must be added to make them commercially useful. For other resins, like high-density polyethylene (HDPE) that can be satisfactorily processed in neat form, in virtually all cases, some additive or additives, such a colorants, are used to add color to the formed product like an HDPE white milk bottle or a colored motor oil bottle or an ultraviolet (UV) absorber to prevent discoloration from exposure to sunlight.

This process of adding other materials is defined as compounding, or the creation of a compound, a mixture. The additives that are added to neat polymers include colorants, stabilizers, flame retardants, impact modifiers, plasticizers and dozens of others, including a lot of important fillers and reinforcements.

Plastic compounding is a big business that is done by three different kinds of companies. These companies are usually grouped either as resin producers, plastics processors (that is, firms that process and shape resins and compounds by injection or blow molding, thermoforming, and extruding) and independent compounders. Some companies perform more than one of these activities.

Reasons for Doing This Study
Plastics compounding is a big business (or group of businesses) that is of interest to a wide group of organizations and individuals involved in the design, development, manufacture, sale and use of plastics and plastics compounds and products made from them.

BCC Research updates this study to provide a new and comprehensive reference for those involved in and interested in plastics and plastics compounds. We have sorted through, organized and condensed information from a number of sources and reference materials to compile this report.

We have tried to cover the overall market and in doing so have included several critical issues that should shape plastics compounding for the next five years. These include biocompounds, carbon fiber, carbon nanotubes, natural fiber reinforcements and environmental regulations.

Scope of Report
This report covers the compounding of major thermoplastic resins. The high-volume commodity resins include high-density polyethylene (HDPE), low-density polyethylene (LDPE), linear low-density polyethylene (LLDPE), polypropylene (PP), polystyrene (PS), polyvinyl chloride (PVC) and thermoplastic polyesters (primarily PET).

Engineering thermoplastics (ETPs) covered include polybutylene terephthalate (PBT), nylons (polyamides), polycarbonates, acrylonitrile-butadiene-styrene terpolymers (ABS) and some real specialties like polyacetals and polysulfones. This report also includes an introduction to thermoplastic elastomers and some biocompounds—plastics that are made from plants instead of hydrocarbons. It excludes thermosetting resins since they have different chemistries and are usually processed differently.

The plastics compounding market is segmented by each of the above resins and by each of the three plastics compounding groups. Applications and markets by volume in pounds or value in dollars are estimated for the years 2016 and 2017 and a five-year forecast to 2022.

Major resin producers, key plastics processors and independent compounders are identified. We discuss the activities, product lines and other information for the major independent compounders.
Our market estimates are based on manufacturers’ total revenues and are mostly for markets for the United States or North America.

Other features in this report include the following:
• Review of key plastics additives used in plastics compounding.
• Important information on major fillers/reinforcements.
• Developments in carbon fiber and carbon nanotubes for reinforcement of thermoplastics.
• Advances in natural fiber reinforcements.
• Regulatory and environmental developments shaping compounds, ranging from phthalate plasticizers to halogenated flame retardants.
• Key suppliers of plastics additives and fillers/reinforcements.
• Notes of some recent advances in plastics compounding and machinery.

Methodology and Information Source Both primary and secondary research is used for this report. Extensive searches were made of the literature and the Internet, including leading trade journals, technical papers, company literature, government information, pertinent trade associations, etc.

Much product and market information was obtained from the industry principals involved. The information in our company profiles was obtained primarily from the companies themselves, especially the larger publicly owned firms. Other sources include directories, articles and Internet sites.

Chapter 2: Summary and Trends
The compounding of plastic resins is the addition of other materials to neat resins in order to add desirable properties or to make them more processable. This type of operation is conducted by three types of companies: (1) resin producers, (2) plastics processors (such as injection and blow molders, thermoformers, extruders and film/sheet producers) and (3) independent compounders—companies whose business is making plastic compounds and masterbatches, not resins or molded plastics products.

The role of each group varies by product segment, with large-volume processors such as extruders of sheet, film and pipe, and profiles assuming a more important compounding role than batch-focused processors like injection molders.

Over the years, the compounding growth rate for resin producers has generally been slower than that of processors and compounders, as these latter companies take a bigger role in markets where significant proprietary technology is involved. Compounding trends are also highly dependent on different economic scenarios; for example, when polyethylene prices are high, PE bag makers and other large processors often compensate by increasing the addition of (that is, compounding with) cheaper calcium carbonate filler.

The production of compounded plastics is a large business and a highly competitive one. Competition is based on many factors, including speed, delivery, service, performance, product innovation, product recognition, quality and price.

Based on our research, BCC Research sees trends of growth in thermoplastic compounding, such as:
• Compounding by processors should grow faster than that by producers or independent compounders.
• Calcium carbonate will remain the dominant thermoplastics filler with almost 80% of the filler market by volume.
• Carbon fiber reinforcement demand will continue to grow at double-digit rates, led by industrial (including automotive/energy) applications.
• Global sales of carbon nanotube-reinforced polymers will continue to grow at double-digit rates from 2017 to 2022, but probably more slowly than in the recent past.
• Natural fiber-plastic composites should continue to increase at compound annual growth rate (CAGR) of REDACTED% from 2017 through 2022, led by construction-molded applications.
• Use of masterbatches (primarily color concentrates) should grow near our projected U.S. gross domestic product (GDP) rate, at REDACTED% from 2017 to 2022.

The overall mix should change only slightly in the next five years, but there may be swings within specific groups. The trend for resin producers to compound internally should remain relatively stable and with lower growth than processors or independents. The trend for processors to compound fillers should continue, as prices remain stable and relatively high for major polyolefins.

The independent compounding group includes several types, including proprietary, custom, toll and concentrate compounders. Independent compounders should assume a more technical role as markets evolve and importers begin playing a larger role in the polyolefins and other commodity markets.

Developments There are some significant developments that changed or will change the images of North American plastics compounding markets, covering all segments of the industrial chain from resins, additives, fillers and reinforcement to plastic end products. They are described in the following.

Plastics Users The plastic compounding business is boosted by the growing consumption from downstream industries, such as automotive, building/construction, electrical/electronic and packaging.

Automotive For automotive applications, examples include:
• Porsche said it will be the first global automaker to offer the all-carbon-fiber-reinforced plastic (CFRP) wheel when it debuts in early 2018 as an option on the 911 Turbo S Exclusive series.
• General Motors could use carbon fiber for the beds of its redesigned full-size pickups to improve performance and reduce weight within the next two years.
• Ford said bamboo composite could be ready for production within five years for applications with low-impact requirements. Ford already uses wheat straw, rice hulls and cellulose fibers to reinforce plastics in automotive parts. The bamboo material will be provided for Asian markets first as the feedstock is readily available there, but North America will be the next targeted region.
• Chemically treated glass microspheres give significant weight savings in body panels for the 2016 Chevrolet Corvette. Continental Structural Plastics Inc. developed a sheet molding compound with glass microspheres replacing calcium carbonate filler. This substitution cuts 20 pounds off the weight of the Stingray Coupe model.

Building/Construction For building/construction industry, an example is the success of Paragon Windows & Doors, a company that makes windows from an expanded polymer composite, a material produced in the presence of physical/chemical blowing agents, resins and modifiers that result in foaming materials with closed cells to enhance and improve the window’s impact resistance, weathering characteristics and thermal performance.

Bioplastic Resins Increasing Raw Material Supply Expecting for strong growth of bioplastic demands, bioplastic resin suppliers are expanding the rawmaterial supply. As an example, Novamont will double production of its Origo-Bi-brand biopolyesters byearly 2018, which will increase Novamont’s annual production capacity for Origo-Bi from REDACTED million pounds to REDACTED million pounds. Origo-Bi is used in Novamont’s production of its Mater-Bi-brandbiodegradable and compostable bioplastics.

New Production Routes Bioplastic companies are developing new routes for making bioplastics from different types of raw materials.

Examples include:
• In 2017, Braskem and the Danish-based Haldor Topsoe signed an agreement to develop a pioneering route to produce monoethylene glycol (MEG) from sugar. The agreement includes the construction of a demonstration plant in Denmark, which will start operation in 2019. MEG is a key component of PET resin.
• The Singapore-headquartered Hydal Corp. will start the production of a PHA biopolymer (PHB) from used cooking oil in Slovakia on the site of its Slovak partner.

It is the first industrial plant for production of this biopolymer. The annual production capacity of the factory in the first phase will be REDACTED metric tons with up-scaling to REDACTED metric tons. Production will begin by the end of 2018.

Plastic Additives New Products Launch Plastic additive producers develop and launch new products to meet the rising requirements from the market and customers.

Examples include:
• Clariant Masterbatches launched in late 2017 the SENSEACTION color masterbatches for use in the production of caps and closures used on bottled water packaging. The masterbatches are free of detectable negative organoleptic (taste and odor) effects.
• In 2017, Arkema developed Durastrength 440 impact modifier for PC and alloys. In 2016, Arkema too launched Orevac IM, a new range of high-impact performance modifier for polyamide compounds; the modifier includes two new grades, Orevac IM300 and IM800 grafted polymers.

Regulation Changes
The changes of plastic additive regulations in North America and other regions will impact the market and thus influence the product lines of the plastic additive makers. For example, the European Commission could ban the use of di-2-ethylhexyl phthalate (DEHP) and other phthalates in electrical equipment by July 2019, and a similar restriction for medical devices is expected to be enforced in 2021.

In North America, plasticizer producers also prepare for the possible impact on the North American market. To tackle this problem, in March 2016, Eastman launched Eastman VersaMax Plus plasticizer, a new member of its nonphthalate plasticizer family; and in November 2016, BloodCenter of Wisconsin (BCW, part of Versiti) and Eastman announced the results of a clinical trial evaluating a new plasticizer for blood bags. The clinical trial results demonstrate that Eastman 168 SG nonphthalate plasticizer, a sensitive-grade di-2-ethylhexyl terephthalate (DEHT), is an alternative for medical applications.

Capacity Expansion Plastic additive producers expand their capacity to meet the strong demands for the North American and global plastic compounding markets.

Examples include:
• In the middle 2017, Addivant started a multimillion dollar expansion for its Weston 705 nonylphenol-free antioxidant production at the company’s Morgantown, W.Va., manufacturing facility. Weston 705 is used to replace nonylphenol-based antioxidant in food packaging while also complying with global regulatory requirements.
• Ampacet expanded production in Europe, and the new lines started operation in December 2017. The company produces a high-efficiency antioxidant masterbatch that can protect reprocessed or recycled polyolefins from degradation during processing.

It is primarily recommended for clear packaging films. The masterbatch is approved for food-contact uses.
Optimize Production Severe competition forces plastic additive producers to optimize the global production to better supply the market. As an example, the Boston-headquartered Cabot stopped the production at its carbon black facility in Merak, Indonesia, in early 2016 and is consolidating production at the company’s another plant in Cilegon, Indonesia.

The company introduced superconductive carbon blacks for high conductivity at low loadings. Its Vulcan XCmax series is targeted for use in wire and cable, antistatic flooring and safety systems, automotive fuel tanks and inlets, (electrical/electronics) (E/E) products, and coatings.

Fillers and Reinforcement Capacity Expansion Filler and reinforcement materials producers are increasing their capacity to satisfy the fast-growing demands. As an example, SGL Group will increase its carbon fiber capacity to 88 million metric pounds per year in the next few years. Another example is that OCSiAl, a Luxembourg-headquartered company, will invest about €REDACTED million to €REDACTED million on a plant for single-wall carbon nanotubes in Luxembourg;the plant will have an annual capacity up to 250 metric tons and is scheduled for launch in 2020.

New Products Launch New products are developed for catering to the new market trends such as weight reduction, high strength, improved compounding performance and new applications.