Compounding of thermoplastics is showing strong growth in Asia while demand for masterbatches in the region is experiencing rapid advances, the British market research group Applied Market Information (AMI, GB-Bristol BS1 3QP; www.amiplastics.com) says in two reports just published. Massive growth in China is responsible for fuelling expansion in both sectors, the researchers say.

According to “AMI´s guide to the thermoplastics compounding industry in Asia”, demand for compounds in the region was around 7.8m t in 2004. It says the market has seen annual average growth rate of almost 10% since 2000, driven by demand for compounds in industries such as construction, automotive, household appliances, electronic equipment, wire and cable.

Over half of the 641 compounders of thermoplastics listed by AMI are based in China. They range from large scale, long established, former state-owned enterprises operated by leading polymer producers PetroChina and Sinopec to relative newcomers including Western-led investments from Clariant, PolyOne and DuPont.

More than 70% of demand in China is relatively “unsophisticated,” the report says, with the majority of production for simple colour or PVC compounds. Production of technical thermoplastic compounds is more limited, so that many more sophisticated compounds are being imported. The survey adds that significant demand growth has also emerged in Thailand and India in recent years, while the compounding market has been shrinking in Singapore as production capacity is moved to lower cost locations in Malaysia, Indonesia, Thailand and China.

In its multi-client report “Thermoplastic masterbatches in Asia: Opportunities in an advancing market” AMI says that although Asian demand for masterbatches has advanced rapidly in recent years, there is still significant room for further growth.

Currently, masterbatches claim 43% of the colouring market for plastics in Asia. According to AMI, market growth in future will be fuelled both by increased demand for plastic components and continuing substitution of masterbatches at the expense of competing colouring methods. The consultants note that tight colour specifications by Western and Japanese OEMs are increasingly influencing the trend.

Asian demand for masterbatches has grown from just under 90,000 t in 1990 to nearly half a million tonne in 2004, with average year-on-year increases of 13%. Production capacity has also grown, and AMI assesses the region´s production in 2004 at around 480,000 t.

In its view, demand will grow at an average of 11%/ year up to 2008 when Asian market demand will be in excess of 780,000 t.

As in other business segments, China has emerged as the most important market for masterbatches in the Asia, according to AMI. Its figures show that in 1994 China accounted for 23.2% of Asian demand, but this climbed to 31.8% in 1999 and 44.8% in 2003. However, the consultants say China´s masterbatch consumption continues to trail its demand for polymer, which accounted for 60% of total regional demand in 2003.

Book Service: “The Thermoplastics Compounding Industry in Asia”, 2004, 125 pages, A4 soft cover, EUR 720.00 + VAT: PIE-No. B 46793. • “AMI´s 2004 South East Asian Plastics Industry Report”, 2004, 216 pages, A4 soft cover, EUR 720.00 + VAT: PIE-No. B 46792.