Demand for Independently Compounded Thermoplastics to Reach 7.5 Billion Pounds in 2013

Demand for independently compounded thermoplastics in the US is forecast to rise 2.7 percent yearly to 7.5 billion pounds in 2013, valued at $6.0 billion (resin cost only).  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. Further growth will be threatened by intense competition from forward-integrated resin producers, as well as backward-integrated plastic processors, in pursuit of higher profit margins.   These and other trends are presented in Thermoplastic Compounding by Independents, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

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 percent yearly to 920 million pounds in 2013. Advances will be fostered 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 percent per annum to 1.3 billion pounds 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.

Demand for independently compounded engineering plastics will be driven by growing needs for custom tailored formulations with higher performance ranges, with further gains constrained by competition from resin producers. Leading engineering resins are acrylonitrile-butadiene-styrene, 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 TPE) and polypropylene.  Independently compounded polystyrene will exhibit the slowest advances due to cost and performance disadvantages vis-a-vis polypropylene and other resins.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.