Engineering plastics account for more than 10% of total plastics demand worldwide, demonstrating exceptional performance and mechanical properties compared to popular commodity plastics such as polyvinyl chloride (PVC), polystyrene, polyethylene, and polypropylene. Superior heat resistance, chemical resistance, fire retardancy, and impact resistance position engineering plastics as an ideal material for a wealth of engineering applications, thereby boosting the engineering plastics market's performance. Every year, more than 25 MT of engineering plastics are produced globally. These plastics are used across various industries, including building and construction, automotive, electrical and electronics, consumer goods, packaging, medical, and industrial goods. In 2018, the automotive industry was the largest consumer of engineering plastics.
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Automotive Industry Remains at the Forefront of Demand Generation, Electronics Industry Follows
Demand growth in the automotive industry is primarily driven by the rising trend of lightweight and fuel-efficient cars. Fuel efficiency has become integral to car design due to stringent environmental regulations, rising fuel costs, and the global push towards emobility. Engineering plastics are ideal for lightweight cars, replacing metal and glass in various interior and exterior applications. The electrical and electronics industries are also major consumers of engineering plastics. These plastics offer design freedom and the ability to match the design and functional complexities in electronic devices. They add durability, thermal and electrical insulation, and impact resistance to end products.
In terms of demand and production, the Asia Pacific region led in 2018, with China occupying the lion’s share. The automotive and electronics industries in China are expanding rapidly due to the shift towards lighter and durable materials, providing ample opportunities for market growth. Europe and North America are also likely to exhibit steadfast growth due to stringent government regulations regarding greenhouse gas emissions and the push for developing lightweight materials for the automotive industry.
Engineering Plastics Market Benefits from a Shift Toward Lightweight and Durable Materials
The introduction of effective metal alternatives continues to progress in various end-use industries, driving the growth of the engineering plastics market. New technological advancements and material innovations will further allow engineering plastics to explore new application areas. A strong rebound in the construction industry across developed economies is likely to bode well for the engineering plastics market. The soaring adoption of these plastics for applications in skylights, window glazing, and roofing systems of non-residential buildings is expected to drive demand further. ABS, polycarbonate, and polyamides will continue to be the most sought-after product categories in the engineering plastics market, collectively accounting for more than 65% of the global demand recorded in 2018.
There is also a growing trend of shifting from traditional materials such as glass and metal to engineering plastics in medical devices. Engineering plastics can compete with their metal counterparts in strength and offer the added advantages of being lightweight, cheaper, and flexible. Manufacturers are also looking for alternative materials like engineering polymers to reduce expenses, especially with elements like payment reforms, medical device taxes, and globalization impacting costs.
Low Recycling Rates Could Play a Spoilsport
Recycling remains a major challenge for the otherwise flourishing engineering plastics market. Plastic recycling rates are remarkably low across all regions, generating larger waste volumes that are either incinerated or landfilled. Governing authorities across developed economies are developing new business models and processes to recycle this waste. Europe is leading the way for recycled materials with policies favoring the adoption of a circular economy and technological advancements in recycling processes. However, the increasing global focus on clean technologies and e-mobility elements like electric vehicles may reduce the demand for some engineering polymers, particularly those used in under-the-hood applications. Advanced composites can compete with engineering plastics, potentially hampering the market's growth in certain applications.
Strategic Focus Continues to be on Capacity Expansion and New Product Developments
Capacity expansion and product innovation are key strategies for gaining an advantage in the competitive market. Prominent companies in the engineering plastics market, such as BASF, Celanese, Covestro, SABIC, Domo, and DSM, have expanded their production capacities to meet the growing demand from key end-use industries, including automotive, electronics, and building and construction. Additionally, these companies are focusing on production and logistics digitalization to mitigate inefficiencies and environmental impact. Manufacturers are also relying on strategic mergers and acquisitions and joint ventures to strengthen their regional foothold.
Recent Notable Developments
In 2019, DSM acquired SRF’s engineering plastic business to gain a competitive advantage in the Indian market. This acquisition allowed DSM to save on capacity expenditure and acquire a consumer base in India’s automotive and electronics markets.
In 2020, BASF SE acquired Solvay’s polyamide business to strengthen its position and integration across the value chain.
Regional Classification of the Global Engineering Plastics Market:
North America:
• U.S.
• Canada
Europe:
• Germany
• France
• Spain
• U.K.
• Italy
• Russia
• Rest of Europe
Asia Pacific:
• China
• Japan
• India
• Southeast Asia
• Rest of Asia Pacific
Latin America:
• Brazil
• Mexico
• Rest of Latin America
Middle East and Africa:
• GCC
• South Africa
• Rest of Middle East & Africa