The global masterbatch market is anticipated to grow at a CAGR of 6.5% during the forecast period of 2023 and 2030. It is anticipated that one of the primary factors that will drive growth in the global market over the forecast period will be the substitution of plastics for metals in various end-use industries, such as the automotive and transportation, building and construction, consumer goods, and packaging industries. The demand for various types of plastic that use the product for imparting functional features is being driven by the rising emphasis placed on the use of plastic in the automotive industry in order to decrease vehicle weight and, as a result, increase the fuel efficiency of the vehicles. There has been an uptick in the number of automobiles being manufactured in a number of the developing economies in the Asia-Pacific region, including China, India, and Japan. In the region throughout the course of the projection period, it is anticipated that this would further drive up the need for plastic components. However, stringent environmental regulations related to the nonbiodegradability of plastics pose a challenge to the market because such regulations affect the adoption rate of plastics, which in turn has implications on the demand for the product. This presents a challenge for the market because such regulations affect the rate of plastics adoption.
Adoption of Plastics as a Substitute of Metal in Automotive Applications Remains the Key Driver
Plastics offer technological properties that are far superior to those provided by metals. Engineering plastics find widespread application in the automotive industry, where they are utilised for a variety of components including steering wheels, airbags, seatbelts, bumpers, and dashboards. A decrease in vehicle weight will result in an improvement in the vehicle's efficiency when it comes to the use of gasoline. In addition, the design, safety, and environmental sustainability offered by plastics are superior to those offered by metals. Plastics of low weight, such as polypropylene and polycarbonate, are used by makers of automobiles and aeroplanes for applications like windows, hoods, and interiors. The expansion of the masterbatch market will be driven in large part by the rise in the consumption of plastics in automotive applications. In the process of colouring automotive plastics for use in the interior and exterior components of vehicles, a masterbatch is utilised extensively, particularly in the form of colour and additive. As a result, businesses develop unique masterbatches to use in the manufacturing of their automobiles.
The demand for electric vehicles is the primary driver behind the ongoing expansion of the global automotive sector. China alone is responsible for one-third of the world's car market. The growth of the automobile industry will be aided by consistent economic expansion in the United States and success in Europe, both of which will help boost earnings from manufacturers.
Expanding Demand for Biodegradable Polymers
The significant demand for bio-degradable masterbatches in Europe can be attributed, in large part, to the region's thriving medical industry. The expansion of polymer applications in rapidly increasing areas such as medical implants, packaging, and disposable tools and gadgets is the primary factor driving the growth of the overall masterbatch industry. The demand for medical polymers and other biodegradable polymer products is expected to increase over the next few years as a result of a number of factors, including the rising incidence of chronic diseases and the proportion of the population that is getting older. This is also expected to have a positive impact on market share.
Growing Demand in The Building and Construction Industries
Plastics and polymeric compounds are becoming increasingly important in the building and construction industry. They are frequently replacing traditional materials because they are more durable, long-lasting, attractively tough, have high strength, and provide UV or weather resistance. In addition, they have flammable and antimicrobial properties, as well as a number of other characteristics. It is an additive that is used in plastics, and its primary purpose is either to colour polymers or to provide plastics with useful physical qualities. It is frequently utilised in the production of plastic building materials such as PVC profiles, PVC pipes, PPR pipes, glow signs, water storage tank insulation foam, door indications, fire extinguishers, and the inside of Starlite ceilings, amongst other applications. The rapidly expanding building and construction industry are driving up demand for plastic materials to be used in building and construction, which is expected to be the primary factor driving the market over the next few years.
As a result of an increase in the number of residential, non-residential, and infrastructure projects, it is anticipated that the market value of this sector will grow at an annual rate of 4.2%. The expansion of the building sector around the world is providing a boost to the construction sector. Impetus will be added to the market as a result of the expansion of new infrastructure and the accompanying increase in investments, particularly in the transportation, telecommunications, and energy and utility sectors. It is anticipated that spending by the Chinese government on various forms of infrastructure will propel the country's construction industry. The construction industry in Thailand saw a recovery in 2018, and it is probable that the rate of growth will accelerate as a result of growing investments in the development of public infrastructure. It is projected that the construction industry in Saudi Arabia will experience recovery as a result of developments in transportation and mobility systems, advancements in social infrastructure, and megaprojects involving power. Because of historically low financing rates, robust economic expansion, and a backlog of unmet demand, the building industry in Europe is expanding at a breakneck speed. The residential, non-residential, and civil engineering sectors, as well as new and renovated buildings in these areas, are driving growth in Europe's construction industry. It is anticipated that half of the worldwide expenditure on construction will come from countries in the Asia Pacific region, with China, Indonesia, Japan, South Korea, and Malaysia displaying the highest potential for growth in this industry.
Expanding Plastic Packaging Industry
The plastic packaging business experienced significant expansion, accompanied by a consistent shift towards new retail formats. The expansion of organised retail is another factor that contributes to rising sales rates, which in turn drives up the demand for inventive and appealing packaging. One of the most rapidly expanding subsectors within the retail industry is the food and beverage sector. The expansion of this industry is projected to boost the demand for packaging, particularly plastic packaging, which helps to improve the quality of food and extends the amount of time it can be stored. It is anticipated that the packaged food market will experience substantial expansion. In addition to the food and beverage industry, the pharmaceutical industry is also a significant user of packaging. It is projected that the pharmaceutical business will expand by a rate of over 12%.
Packaging and labelling are becoming increasingly important to the pharmaceutical industry as a means of conserving and selling their products, complying with new regulations, and boosting the protection afforded to patients. Plastics are becoming increasingly important in the packaging of pharmaceutical products due to their properties, which include high dimensional stability, the ability to prevent moisture absorption, low water absorption, clarity, high impact strength, stress resistance, resistance to heat and flame, and other properties. Consequently, as a result of growing skills in the packaging of food and beverages, pharmaceutical products, home and personal care products, and other heavy industrial goods, the market for plastic packaging is fast expanding.
Within the realm of food packaging, plastics can be utilised in a broad variety of different ways. The base polymers are treated with masterbatch in order to endow the plastics with the essential properties and functions. Typical plastics take years to decay, thus these additives are used to speed up the process of plastic product breakdown while also providing the product with an appealing hue. In addition, conventional polymers take years to degrade. It is the most efficient method of colouring plastic, and it contributes to the colouring and functional features that are added to plastic packaging. It is anticipated that this will give a boost to the packaging industry, which will then contribute to the growth of the market.
Limitations Caused by The Availability of Low-Cost Products of PoorQuality
The availability of low-priced products from developing nations, particularly China, acts as a barrier to the expansion of the market for masterbatch. Even though the level of competition already present in the market makes it difficult for new companies to break in, it is still possible for manufacturers of masterbatches of lower quality to overcome these barriers. Due to the very disorganised nature of the masterbatch market as a whole, it is challenging for market participants to satisfy the ever-increasing demand in their own country. Emerging economies like India and Indonesia are home to a plethora of small businesses in the plastic processing industry. These players manufacture plastic goods at lower prices in order to compete in the domestic market. These competitors manufacture plastic goods at lower prices by utilising masterbatches of poorer quality. These masterbatches result in an unequal mixing of the plastic mixture, which gives the product an unattractive appearance or an uneven grade.
Rising Cost of Quality Raw Materials
The rising cost of quality masterbatches is one of the primary issues of worry that will act as a barrier to the growth of the masterbatches market as a whole in the years to come. There is a significant increase in cost for many raw materials, including titanium oxide and black carbon. Since crude oil is used in the production of base carriers like polyethylene, polypropylene, and polystyrene, the price of the raw materials is affected by the nature of the commodity's inherent volatility. The introduction of higher-value products that offer improved performance and quality is another factor that has contributed to the rise in prices. In addition, the development of bio-based masterbatches for a variety of applications, substantial investments in research and development endeavours, and the application of cutting-edge technologies are contributing to an increase in the cost of producing masterbatches, which in turn contributes to higher overall product costs.
Polymers account for almost half of the entire cost of production; because they are the vehicle through which colour pigments are distributed, they are necessary. This results in polymers having a significant impact on manufacturing costs. Due to the fact that polymers are derivatives of crude oil, their prices are just as subject to fluctuation as the price of crude oil. The costs of important raw materials, such as polymers and other compounds like titanium dioxide, are inherently subject to a great deal of fluctuation. The prices of polymers are highly unpredictable since they are highly dependent on the movement of the prices of crude oil.
Environmental Concerns
Due to the fact that it is mixed with various additives like stabilisers, flame retardants, and colouring agents, the masterbatch that is currently utilised in recycled plastics is detrimental to the health of the environment. Because recycled plastics cannot be broken down by microbes or bacteria, companies that make products from plastic face a difficult challenge. In addition, the utilisation of plastics is subject to a number of different restrictions. For instance, Europe has already prohibited the use of plastics that are only intended for single use because of the wastes and pollutants that are caused by the recycling of plastics. This will have an effect on the usage of plastics in applications that are seeing rapid growth, such as packaging.
Coloured Masterbatches Witnessing High Demand
In 2021, black masterbatch held the largest share of the market, accounting for more than 23% of total sales. Because of the rising demand for tyres, PVC containers, and other products with applications in the automotive and transportation, building and construction, agricultural, and packaging industries, there has been an increase in the need for black masterbatch. Over the course of the forthcoming time period, it is anticipated that the growing demand for a variety of agricultural products, such as drip irrigation tubing and tape, greenhouse films, shade cloth, and geomembranes, will also contribute to the expansion of the market. Plastic items receive the colours that are desired after being dyed with colour masterbatches, which are exactly what their name implies. The primary purpose of this is to lend an appealing appearance to the final components of vehicles, electronic appliances, and flexible packaging solutions for food, beverages, and medicines. This is the most common application of this.
PP Led the Masterbatches’ Market by Polymer
In 2021, polypropylene (PP) masterbatch held the greatest share of the market in terms of revenue, with more than 25% of the total revenues. It is anticipated that there will be an increase in demand for polypropylene as a carrier polymer as a result of the excellent mechanical strength and flexibility that it offers. The quality of the surfaces that polypropylene is used on is also improved. Because of its low weight, it is increasingly being employed in the automotive sector to replace components that were formerly made of metal. Over the course of the period covered by this forecast, the expansion of the polypropylene segment is anticipated to be driven by all of these factors. The widespread application of polypropylene in consumer goods is one aspect that has contributed to the expansion of the market for the commodity in question. Because it inhibits the growth of microorganisms and bacteria, it can be useful in the production of a wide variety of products that are used in the building and construction industries. Due to environmental concerns, polypropylene manufacturers are shifting their attention from synthetic to biobased sources, which is expected to fuel market growth over the forecast period.
Packaging Industry Remained as the Most Dominating End User Segment
In 2021, packaging masterbatch held the largest share of the market, accounting for more than 25.0% of total revenue. Retail, industrial, and consumer packaging are all subsets of the packaging industry. Within these subsets, flexible and rigid packaging options are available. The rise in the number of people living in urban areas who have a need for pre-packaged goods is driving up the demand for various types of packaging. Packaging that is user-friendly, eco-friendly, flexible, protective, and transparently traceable is essential for satisfying customer needs. As a result of the fact that plastic packaging can satisfy all of these requirements, its demand is anticipated to increase, which is anticipated to result in an increase in the demand for the product. There is a massive amount of untapped potential for expansion in the global packaging market in developing countries such as India and China.
During the forecast years 2023 to 2030, the automotive industry is anticipated to have the highest growth rate of all applications in the masterbatch market. Plastics are a material that is frequently used in the automotive industry for the interiors of vehicles. In modern times, there has been a rise in the number of applications that call for plastics to be used outside. Plastics are used in the construction of many different parts of automobiles, including the bumpers, the seating, the dashboards, the windows, the screens, the lamp covers, the airbags, the insulation, the seat belts, and the door panels. PBT, PET, PVC, ABS, PA, PS, and PC are some of the plastics that are utilised in the manufacturing process of automotive components. The majority of electrical and electronic components found in automobiles are made of plastic goods. The interiors of cars and other automobiles are one of the primary considerations for customers when they are making purchases, and plastics are one of the primary materials used in the construction of these interiors. As people's discretionary spending has grown, so has the desire for automobiles, which has resulted in an increase in the need for the engineering polymers that are used in automobiles. The production of automobiles is rising consistently in the developing countries of the Asia Pacific and Latin America; hence, this industry is expected to see a high development rate during the period of time covered by the forecast. Plastics are gradually replacing metal components in vehicles in order to lessen their overall weight and enhance the efficiency with which they burn gasoline. This revolution is taking place in this industry.
Packaging Led the Revenues While Automotive to be the Growth Leader During the Forecast Period
By 2021, packaging accounted for the largest application segment with its revenue contribution of about 30% followed by the construction segment. The automotive industry is expected to grow at the largest CAGR of 7% during the forecast period of 2023 to 2030, thereby registering the fastest growth. The majority of car interiors are composed of plastics and plastic composites of varying types. In many cases, the components of a vehicle's exterior must be able to withstand extremes of temperature, including heat, cold, and ultraviolet radiation. As a result, these are included in order to improve the plastics' various physical properties.
APAC to Be Both, Revenue and Growth Leader
In 2021, Asia Pacific had the greatest share of the market, accounting for more than 28% of total revenue. The presence of numerous end-use industries, such as automotive and transportation, packaging, building and construction, and consumer goods, can be credited with the rise in demand that has been observed. During the forecast period, It is anticipated that the rapid expansion of industries such as packaging, consumer goods, automotive and transportation, and agriculture in the Asia Pacific, which are among the major end-use sectors that use the product, will be a major market driver. Additionally, the growth of the building and construction sectors in the Asia Pacific will also be a major market driver. Therefore, APAC is anticipated to lead the growth during the forecast period of 2023 to 2030 by registering the highest CAGR. China is anticipated to dominate the market with a considerable proportion owing to favourable investment policies and government efforts. The demand for consumer products will increase as a result of a growing population as well as an increase in the average quality of life. The rapid expansion of industrial activity in the region is expected to have a favourable impact on the demand during the forecast period.
Because of the expansion of the e-commerce industry, the market for packaging materials in the United States has seen a significant increase in recent years. The manufacturers of consumer goods are creating appealing product packaging in the hopes of attracting a wide number of customers and so increasing sales of their wares. It is expected that there will be an increase in demand for the product over the course of the projection period as a result of the appealing packaging that can be made using a combination of various types of masterbatches and polymers. It is anticipated that Europe will maintain its position as the second-largest regional market in terms of revenue throughout the forecast period. In 2021, Europe ranked as the second-largest regional market.
Significant Entry Barriers to Limit the Entry of New Players
The market remains fragmented with the presence of significant global and domestic market players. The key companies adhere to the regulations governing regulatory compliance and participate in research and development efforts in order to develop innovative products. There are significant entry barriers for new market players as the majority of the key players are integrated across the value chain. Clariant AG remains the market leader with a market share of over 12%. The organisation also has a significantly high demand for masterbatches across geographical regions such as APAC, Europe, North America, Latin America, and MEA. In the market for masterbatches, PolyOne Corporation and Ampacet Corporation combinedly hold over 25% of the market share. The most significant companies in the market are currently engaged in research and development operations aimed at developing superior quality colours in order to deliver increased features. In addition, the businesses are actively pursuing strategic partnerships in an effort to boost their research and development activities. The companies placed a significant amount of emphasis on expanding the areas that they served in order to increase their market share. Businesses are committed to developing new products in order to meet the ever-changing preferences of their customers. In addition, to such large players, there are small and medium regional players that are active in various regions of the world. Industrial participants are up against fierce competition from regional and international businesses that have a broad distribution network, as well as good supplier and regulatory experience.
Notable players in the global masterbatch market include Avient Corporation (US), LyondellBasell (US), Ampacet Corporation (US), Cabot Corporation (US), Plastika Kritis S.A. (Greece), Plastiblends India Ltd. (India), Hubron International (UK), Tosaf Group (Israel), and Penn Color, Inc. (US) (US). To meet the ever-increasing demand for masterbatches, the producers are putting their efforts into the creation of innovative technologies and the expansion of their service offerings. The important activities that are being undertaken in the global masterbatch market are the enhancement of the product portfolio and the formation of strategic partnerships.
Historical & Forecast Period
This study report represents analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. key data point that enables the estimation of Masterbatches market are as follows:
Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top down and bottom-up approach for validation of market estimation assures logical, methodical and mathematical consistency of the quantitative data.
| ATTRIBUTE | DETAILS |
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| Research Period | 2022-2032 |
| Base Year | 2023 |
| Forecast Period | 2024-2032 |
| Historical Year | 2022 |
| Unit | USD Million |
| Segmentation | |
Application
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Product
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Carrier Polymer
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Region Segment (2022-2032; US$ Million)
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Key questions answered in this report
