July 13, 2024
Commodity Plastic Market

Commodity Plastic Market Accelerates Growth through Circular Economy Trends

The global commodity plastic market is estimated to be valued at US$ 593.45 billion in 2024 and is expected to exhibit a CAGR of 6.1% over the forecast period 2024 to 2031.
Commodity plastics, also known as bulk plastics or engineering plastics, are widely used synthetic polymers like polyethylene (PE), polypropylene (PP), polystyrene (PS), polyvinyl chloride (PVC), and polyethylene terephthalate (PET). They provide versatile properties like durability, low weight, and resistance to moisture, chemicals, and corrosion. Commodity plastics find applications in electronics, packaging, construction, automotive, consumer goods and healthcare industries due to their cost effectiveness. The growing preference for lightweight and durable materials along with increasing demand from end use industries are fueling the demand for commodity plastics.

Key Takeaways

Key players: Key players such as Exxon Mobil, SABIC, BASF SE, and Dow Chemical are focusing on developing bio-based and recycled plastics to meet the rising demand for sustainable solutions from end use industries. They are investing heavily in R&D to commercialize bio-plastics along with improving recycling infrastructure and technologies.

Growing demand: Rapid urbanization, rising disposable incomes, and growing population are fueling the demand for packaged foods, beverages, consumer goods as well as construction activities globally. This is positively impacting the consumption of commodity plastics.

Global expansion: Major players are expanding their production facilities globally especially in Asia Pacific and Middle East & Africa to cater to the growing local demand. Many companies are also establishing joint ventures with local players for raw material supply and technology transfer.

Market Key Trends

 

The global Commodity Plastic Market size is witnessing a rising trend of circular economy models to reuse and recycle plastics. Government regulations banning single use plastics along with initiatives like extended producer responsibility are encouraging brand owners as well as plastic producers to adopt sustainable practices. Developing bio-plastic production from agricultural waste is another emerging trend as bioplastics address both environmental pollution and agricultural waste management challenges.

 

Porter’s Analysis

 

Threat of new entrants: New companies will find it difficult to enter this market as it requires huge capital investment for setting up manufacturing facilities along with established brand names and distribution channels of existing players.

Bargaining power of buyers: Buyers have moderate to high bargaining power in this market due to the presence of a large number of manufacturers. Buyers can bargain for better prices and demand customization.

Bargaining power of suppliers: The major raw materials used in production such as ethylene, propylene and benzene are supplied by a limited number of suppliers globally giving them moderate bargaining power.

Threat of new substitutes: There exists threat from substitutes like bio-plastics and glass depending upon end-use segments. However, commodity plastics still dominate due to their competitive pricing and versatility.

Competitive rivalry: The market is highly competitive due to presence of numerous regional and global players. Players compete based on pricing, product differentiation, and integrated value chain.

Geographical Regions

North America accounts for the largest share of the global commodity plastics market, both in terms of value and volume. This is attributed to strong demand from industries such as packaging, construction and automotive. Asia Pacific is the fastest growing region for commodity plastics market driven by population growth, rising income levels and rapid industrialization in countries like China and India.

The commodity plastics market in Europe represents significant value share globally. However, its growth prospects are moderate compared to other regions. The major country-level markets in Europe include Germany, France, Italy, UK and Spain. Increasing regulatory pressures to switch to renewable feedstocks restricts market growth to some extent in the region.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it