The prospect for the continued global growth of plastics continues to be bright. After enjoying an 8.6% CAGR from 1950 through 2015 the global demand for plastics is expected to continue to grow at a CAGR of 5.3%, reaching 335 million tons by 2020.
Included in these growth projections are some fairly aggressive projections by industry researchers:
The Asia Pacific region is the largest market for plastics, accounting for nearly 45% of the total market volume in 2013. The region should continue to show strong demand driven in large part by the regional automotive industry. North America and Europe are the most mature markets for plastics, but should see some continued growth mostly driven by innovation in sustainable plastics and bio-based polymers. Central and South America are projected to be the fastest growing region, a smaller base combined with the growth of major end use markets like Brazil and Argentina will fuel demand.
Plastics production is led by Asia with almost 50% of the global production; China alone accounts for 28% of global plastics production. In comparison, Europe accounts for 18% and NAFTA totals 19% of global plastic production.
Based on the latest figures from the American Chemical Council (ACC), production of plastic resins in North America rose to 108 billion pounds in 2014 and the industry continues to expand. As of early 2015, about 225 new plastic resin projects had been announced, representing investments of $137 billion through 2023. The industry is growing and the outlook is positive especially for North America due to the increasing availability of low-cost natural gas.
The top five plastic resin-producing states (Texas, Louisiana, Illinois, Ohio and West Virginia) account for more than 64 percent of total US production.
Packaging is the largest market for plastic resins and is closely associated with retail sales, which have been growing as the economy continues to rebound. Building and construction is another large consumer of plastics the construction market continues its recovery. Transportation is a key market as well and light vehicle sales are strong as interest rates are low. Industrial machinery is another important market that is also improving with increasing domestic investments in manufacturing. The major drain on the U.S. industry globally is export sales due to weaknesses in the European and Asian economies.
Standard plastics (polyolefin, PVC, PS, EPS< and PET) account for 85% of total demand; while Polyethylene (PE) is the leading product segment for plastics and accounted for 34.9% of total market volume in 2013. PE is used in high volumes across various industries such as film and sheet, injection molding, blow molding and pipe manufacturing. Increasing PE capacity addition, particularly in the Middle East and Asia Pacific has led to overcapacity in the market which has seen the prices decline. PET is expected to be the fastest growing product segment for plastics, at an estimated CAGR of 8.5% from 2014 to 2020.
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