Market Trends of Chlorinated Polyethylene Industry
Impact Modifier is Expected to Dominate the Market
- Chlorinated polyethylene (CPE) is a thermoplastic elastomer created by chlorination. CPE, known for its consistent chlorination, offers heightened flexibility and a distinct whiteness. These characteristics render it a favored choice for numerous high-end applications in plastics and rubbers.
- Key attributes of CPE, bolstering its role as an impact modifier, include white hue, non-toxic, and odorless. Its unique structure enhances compatibility, dispersibility, and processability with other polymers and imparts superior physical and chemical properties.
- Further, it has excellent flexibility, bolstering impact resistance, performing well at low temperatures, and exhibiting remarkable weather resistance. It has exceptional flame retardancy and is cost-effective as an impact modifier.
- Chlorinated polyethylene is mainly used as an impact modifier but is also employed in various products, such as PVC profiles, pipes, fittings, and CPVC pipes. It also acts as a toughening agent for plastics like ABS, CPVC, PP, and PS.
- Plastics production on a global scale has surged in recent years, primarily driven by heightened demand across diverse end-user industries.
- Breaking down the figures, China led the charge, accounting for 32% of the world's production capacity, followed by North America at 17% and Europe at 14%.
- With rising demands for various polymers, especially from sectors like packaging, automotive, and others, the spotlight is turning to Styrene-Butadiene Copolymers (SBCs). These SBCs play a crucial role in polymer modification, further fueling the market's growth trajectory.
- Research conducted by the Kansas Technology Center emphasizes that pipes and fittings are the dominant applications for PVC, representing over 40% of its usage. Asia and the United States emerged as pivotal centers for PVC production.
- Insights shared by the European Council of Vinyl Manufacturers underscore that 70% of Europe's PVC production caters to windows, pipes, fittings, and flooring. This solidifies PVC's position as the primary plastic in Europe's construction industry.
- Recent data from the International Pipe Producers Association highlighted a 15% increase in global pipe production in 2023 compared to the previous year, with this growth trend expected to continue into 2024.
- Also, plastic compounders are expanding their global operations to meet escalating demands. For instance, in June 2023, PVC compounder Manner Polymers announced a USD 54 million investment in constructing a PVC compounding facility at a new manufacturing plant in Illinois, United States.
- Additionally, the growing incorporation of plastics across industries worldwide due to the requirement of improved weight and cost reductions is expected to propel the demand for impact modifiers and, thus, ultimately enhance chlorinated polyethylene demand. For instance, according to Our World in Data, the global plastics production volume is expected to reach nearly 573.42 million tons in 2029 compared to 475.39 million tons in 2022.
- Given these trends, the demand for impact modifier applications of chlorinated polyethylene (CPE) is expected to rise significantly during the forecast period.
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Asia-Pacific is Expected to Dominate the Market
- PVC products such as PVC window profiles, pipes, fittings, siding, panels, and fencing are generally considered the major consumers of chlorinated polyethylene as they are crucial in enhancing PVC's performance. These components are widely used in the building and construction industry.
- With the rise in housing construction activity, the demand for PVC products such as PVC window profiles and PVC pipes for potable water supply, drain, waste, and vent systems increases, increasing demand for CPE. For instance:
- The availability of affordable housing in India is projected to rise by around 70% by 2024. As per Invest India, India’s construction industry is expected to reach USD 1.4 trillion by 2025. Also, by 2030, more than 30% of the population is projected to live in urban India, creating a demand for around 25 million additional mid-end and affordable units, likely increasing demand for PVC-based products and chlorinated polyethylene.
- Further, the Finance Minister said that the outlay for PM Awas Yojana is being enhanced by nearly 66% to over INR 7,90,000 million (~USD 21,810 million), which is certainly a boost for affordable housing under the Budget of 2023-2024.
- In 2023, China's real estate developers completed a staggering 998.31 million square meters of floor space, marking a notable increase of over 16% from the preceding year. While China's housing completion rates have largely held steady over the past decade, there was a dip in 2022, attributed to the dual impact of the COVID-19 pandemic and structural issues within the real estate industry.
- Therefore, all the factors above are expected to substantially impact the demand in the market during the forecast period.
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