Solid prospects for independent TP compoundersSolid prospects for independent TP compounders
Independently compounded thermoplastics are projected to show some decent growth over the next few years as custom-tailored formulations become popular as a competitive edge among OEMs.
February 19, 2010
Demand for independently compounded thermoplastics in the U.S. is forecast to rise 2.7% yearly to 7.5 billion lb in 2013, valued at $6 billion (resin cost only), according to a new study from The Freedonia Group, "Thermoplastic Compounding by Independents." Total value, including additives, fillers, and other production expenses, will reach $13.4 billion. Volume gains will reflect needs for higher performance compounds and the unique advantages offered by independent compounders, such as rapid product development and delivery.
Value gains will be fueled by shifts in the product mix toward more highly tailored resin formulations with higher performance ranges. Further gains will be constrained by intense competition from forward-integrated resin producers, as well as backward-integrated plastic processors, in pursuit of higher profit margins, said the study.
Leading engineering resins are acrylonitrile-butadiene-styrene (ABS), polycarbonate, and nylon based on their widespread use in electrical and electronic and motor vehicle parts and components. Independently compounded PVC demand will expand at a below-average pace due to environmental and health concerns, and competition from other resins such as thermoplastic olefins (a thermoplastic elastomer) and polypropylene. Independently compounded polystyrene will exhibit the slowest advances due to cost and performance disadvantages vis-à-vis polypropylene and other resins.
The Freedonia Group’s study noted that the best opportunities are expected for thermoplastic elastomers (TPEs) and polypropylene in light of needs for higher performing, cost-effective materials. Demand for independently compounded TPEs is projected to rise 4.2% yearly to 920 million lb in 2013. Advances will be driven by new areas of growth as a result of design trends emphasizing soft-touch features and improved ergonomics.
Demand for independently compounded polypropylene is expected to expand 3.6% per year to 1.3 billion lb in 2013 based on the resin’s flexibility and low cost. Polypropylene is widely used as a base resin due to its ability to carry heavy filler loadings such as glass fibers, flame retardants, or colorants. Near-engineered grades of polypropylene can be compounded to replace a variety of more expensive engineering plastics.
Compounders will increasingly be called upon to supply a diverse array of specialty products. They will also be faced with demands for compounds with better processability, aesthetics, and performance characteristics for manufacturers under severe cost constraints. Construction will remain the leading market with advances based on a rejuvenated residential building construction segment. Newer applications such as fencing and decking will also aid advances. Demand in construction applications is expected to grow 1.9% annually to 1.6 billion lb in 2013, accounting for 22% of total independent thermoplastic compounding.
The best growth for independently compounded resins is projected for the motor vehicle market as a result of resurgence in motor vehicle production levels and mandates to improve fuel efficiency via light-weighting. Motor vehicles accounted for 17% of all independently compounded thermoplastics in 2008. The motor vehicle market encompasses light vehicles (automobiles, light trucks, and vans), trucks, and buses.
Above-average growth is also expected in consumer and institutional markets, which will be stimulated by medical product applications. Consumer and institutional markets accounted for nearly 17% of all independently compounded thermoplastics in 2008. Medical markets will be the primary growth driver going forward, according to the study, while recreational and other consumer and institutional applications will expand more slowly. —[email protected]
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