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The Plastics Compounding Market

North American thermoplastic compounds market sales forecast to total 100.2Bn pounds by 2020

As plastic resins leave the chemical polymerization reactor in which they are formed, they are "neat" polymers; that is, they are essentially pure compounds consisting only of the molecules of the polymer produced. Some of these resins, like PVC, are almost impossible to process as neat polymers; additional chemicals and other materials must be added to make them commercially useful. For other resins, like high-density polyethylene (HDPE) that can be satisfactorily processed in neat form, in virtually all cases some additive or additives are used, such a colorants, to add color to the formed product like an HDPE white milk bottle or a colored motor oil bottle, or a UV absorber to prevent discoloration from exposure to sunlight.

This process of adding other materials is defined as compounding, or, the creation of a compound, a mixture. The additives that are added to neat polymers include colorants, stabilizers, flame retardants, impact modifiers, plasticizers and dozens of others, including a lot of important fillers and reinforcements.

Plastic compounding is a big business that is done by three different kinds of companies. These companies are usually grouped either as resin producers, plastics processors (that is, firms that process and shape resins and compounds by injection or blow molding, thermoforming, and extruding) and independent compounders. Some companies perform more than one of these activities.

The North American market for thermoplastic compounds reached 87.33 billion pounds in 2014. This market is expected to grow from 88.78 billion pounds in 2015 to 100.2 billion pounds by 2020, registering a compound annual growth rate (CAGR) of 2.4% over the next five years.

Resin producers as a segment will increase from 50.91 billion pounds in 2015 to 56.33 billion pounds by 2020, increasing at a CAGR of 2.0% from 2015 through 2020.

Processors as a segment will grow from 30.59 billion pounds in 2015 to 35.60 billion pounds in 2020 increasing at a 3.1% CAGR for the period 2015-2020.

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