Published: Jul, 2016
The high density polyethylene (HDPE) market is greatly diversified with market players operating across the globe, says Transparency Market Research (TMR). The top five companies operating in the market are present across the value chain and have large plant capacities – they collectively account for 22.3% of the market, says TMR. These top five players include: LyondellBasell Industries, Chevron Phillips Chemical Company, INEOS Olefins and Polymers, ExxonMobil Corporation, and SABIC.
These major players have tough competition among themselves. The entry of various small to medium scale HDPE manufacturers in the market has resulted in the fluctuation of prices, suggests TMR. New entrants are selling products at lower prices thus, intensifying the competition.
Growing Demand for Plastic Packaging Fuels HDPE Demand
There is an increased demand for rigid packaging especially from the food and fast-moving consumer goods (FMCG) industries. This in turn is driving the demand for high density polyethylene. Another factor driving the demand for HDPE is its increasing use in the agriculture sector. HDPE tarpaulins, pipes, and films are widely used across various applications in the agriculture sector.
HDPE pipes have superior properties and attributes, making them the preferred choice over conventional pipes made of PVC. The use of HDPE sheets owing to the excellent UV protection and weather resistance, which they offer, is also driving the demand for HDPE across the globe.
Fluctuating Prices of Crude Oil Impact HDPE Market
The manufacturing of HDPE requires the use of ethylene, a petrochemical derivative. The ethylene market has witnessed substantial supply and cost instability, which in turn is affecting the HDPE market. This is because the cost of crude oil is subjected to sudden fluctuations, which is affecting the cost of the production of petroleum-based ethylene and subsequently, the price of HDPE. The volatility in the price of raw materials is thus, having a negative impact on the growth of the HDPE market.
FMCG and Packaging Companies are Going Green – Demand for Bio-based HDPE to Rise
The growing environmental concerns are causing players in the HDPE market to focus on bio-based alternatives in place of petroleum-based derivatives. Bio-based HDPE not only has environmental benefits, but also eliminates the price fluctuation problem associated with petroleum-based ethylene. Bio-based HDPE reduce the emission of greenhouse gases by 75% and is currently being preferred by major companies such as Procter & Gamble, Tetra-Pak, and Ecover. This is encouraging the growth of the bio-based HDPE market. “Bio-based HDPE will open new opportunities for growth in the market and could very well be the future of HDPE,” states a TMR analyst.
Expanding Food Packaging Industry to Increase Demand for Blow Molding
On the basis of product, the global high density polyethylene market is segmented into pipe and extrusion, blow molding, injection molding, and film and sheet. Of these, blow molding not only led the market in 2014, but this market segment is expected to gain shares and account for 29.1% of the global HDPE market by 2023. The growth in the bow molding segment is driven by the rising demand from the food packaging industry.
On the basis of application, packaging was the largest segment in 2014, accounting for 30.5% of the global HDPE market. The packaging segment will retain its dominant hold over the market in the coming years, due to the high use of HDPE in the rigid and flexible packaging of cans, bottles, films, and packets.
According to TMR, Asia Pacific represented the largest share of 45% in the global HDPE market in 2014. Asia Pacific is expected to gain shares and continue to lead in the market in the coming years. Europe followed Asia Pacific in 2014 and held a share of 20.7% in the global HDPE market.
According to the report, the global market opportunity in HDPE will rise from US$56.13 bn in 2014, to US$84.79 bn in 2023, expanding at a CAGR of 4.5% from 2015 to 2023.
This information is based on the findings of a report published by Transparency Market Research titled “High Density Polyethylene Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2015 - 2023.”
The high density polyethylene market is segmented as follows:
- Blow Molding
- Pipe & Extrusion
- Film & Sheet
- Injection Molding
- Others (Including Rotomolding, etc.)
- Building and Construction
- Others (Including Industrial, etc.)
- North America
- Rest of Europe
- Asia Pacific
- Rest of Asia Pacific
- Latin America
- Rest of Latin America
- Middle East & Africa (MEA)
- GCC Countries
- South Africa
- Rest of MEA