Masterbatch Market Trends

Growth Drivers

• Increasing Adoption in Automotive Industry – The increasing focus on replacing metal with plastic in the automotive industry to reduce vehicle weight and thereby improve fuel efficiency is driving the demand for a variety of plastics that use the masterbatch for imparting several functional properties. According to the International Energy Agency statistics, electric car sales reached a record high in 2021, despite the restrictions imposed due to the COVID-19 pandemic. The electric car sales globally amounted to nearly 6.6 million in 2021, which was double the total sales recorded in 2020. Besides, according to the International Organization of Motor Vehicle Manufacturers (OICA), 80,145,988 automobiles were manufactured in 2021, and 77,621,582 were manufactured in 2020.

• Rising Demand for Biodegradable Masterbatches – The threat posed by plastics to the environment has given way to the use of biodegradable masterbatches. Today’s consumers are demanding that polymers used in manufacturing be biodegradable plastics and compostable. The government is also pushing corporates and manufacturers, especially those in the plastics industry towards sustainability and renewability of their offerings and execute initiatives to reduce their carbon footprint. For instance, according to the International Trade Council, Saudi Arabia released regulations requiring manufacturers, brand owners, and importers to prove that their plastic products are oxo-biodegradable, by using a masterbatch during the manufacturing of their products which has been approved by SASO (Saudi Standards, Metrology and Quality Organisation). The legislation ensures that plastic products made with d2w technology will not be an environmental nuisance.
• Cost Benefit of Masterbatches- When opposed to employing pure pigments or additives, masterbatches provide more cost-effective alternatives. They allow for the efficient dispersion of additives, colorants, and other functional components in finished products, resulting in improved performance and cost savings for manufacturers.

Challenges

• Fluctuation in Raw Material Prices - Since polymers are crude oil derivatives, their prices are as unpredictable as the prices of crude oil. The prices of key raw materials such as polymers and other chemicals namely titanium dioxide, are highly volatile owing to the fluctuations in demand. Crude oil production by the Organization of the Petroleum Exporting Countries (OPEC) is an important factor that affects oil prices. The frequent changes in crude oil prices may negatively impact the market growth.

• Availability of low-quality and cheaper products
• Supply chain disruption due to war & other external factors